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10.07.20

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COVID-19 Chancellor’s Mini Budget

Furlough Bonus

  • £1,000 bonus given to companies who:
    • Have furloughed an employee AND
    • That employee is still working for the employer on 31st January 2021 AND
    • The employee earns at least the lower earnings NI threshold (£520pm) in the period 1 November 2020 to 31 January 2021.
  • The bonus will go to the employer. It will be taxable like any normal income.

VAT for hospitality, accommodation and attractions

  • From 15th July 2020 to 12th January 2021 VAT on qualifying supplies will be at 5% instead of 20% – we have no idea why government have chosen mid-month dates – certainly not for simplicity.
  • Businesses with programmable tills will need to plan in advance – some supplies could have 3 different VAT rates on one till receipt.
  • General Eligibility – the supply of:
    • Food and non-alcoholic drinks for on-premises consumption.
    • Hot take away food.
    • Hot take away non-alcoholic drinks (but not cold take away drinks).
    • Sleeping accommodation and associated facilities.
    • Pitch fees for caravans and tents and associated facilities.
  • So this is relevant to:
    • Restaurants.
    • Cafes.
    • Fish and chip shops.
    • Fast food outlets.
    • Shops that provide take away coffees, etc.
    • Pubs.
    • Mobile catering.
    • Hotels.
    • Holiday Lets.
    • Campsites.
    • Caravan sites.
    • Hostels.
    • Guest houses.
  • Admissions to the following attractions qualify for 5% rate:
    • Theatres.
    • Circuses.
    • Fairs.
    • Amusement parks.
    • Concerts.
    • Museums.
    • Zoos.
    • Cinemas.
    • Exhibitions.
    • Similar cultural events and facilities.
  • If any of the above are eligible for the cultural VAT exemption then the exemption takes precedent.
  • It is anticipated that the businesses will keep the reduction in VAT rather than reduce the prices to the consumer. Again depending on your till set up this may take some reprogramming.
  • Complexities to consider:
    • Flat Rate Scheme – percentages will change TBA (speak to us or monitor HMRC website as no details at the moment).
    • Tour Operators Margin Scheme – impact TBA (speak to us or monitor HMRC website as no details at the moment).
    • Supplies that straddle the temporary reduction eg Season tickets to attractions – (speak to us).
    • Make sure your tills can cope!

Apprenticeships and Traineeships (work placement) grants

  • Apprenticeship grants:
    • £2,000 for new apprentices aged 16-24.
    • £1,500 for new apprentices aged 25 and over.
    • The grant is addition to any other incentives received for employing an apprentice.
    • An apprenticeship is for at least 1 year.
  • Traineeship grants
    • £1,000 for new trainees aged between 16-24.
    • Traineeships are effectively work placement for between 6 weeks and 6 months.
    • For people currently unemployed or working less than 16 hours pw.
    • No obligation for the employer to pay a wage.
  • Both grants are for new starters hired between 1 August 2020 and 31 January 2021.

Stamp Duty Land Tax Reduction

  • Temporary reduction in stamp duty land tax for residential properties – 0% up to £500,000.
Property Value New Rate Old Rate
Up to £125,000 0% 0%
£125,001-£250,000 0% 2%
£250,000- £500,000 0% 5%
£500,001 – £925,000 5% 5%
£925,000 – £1,500,000 10% 10%
Over £1,500,000 12% 12%
  • Maximum saving £15,000 i.e. purchase a house for £500,000.
  • Reduction from 8th July 2020 to 31st March 2021.
  • 3% supplement for second houses still applies on all bands.

Eating Out to Help Out

  • 50% discount up to £10 per person (inclusive of VAT at 5%) on all food and non alcoholic drinks to consume inside.
  • Scheme runs from 3rd August to 31st August 2020.
  • Only for sales on Monday, Tuesday and Wednesday.
  • Businesses who want to use the scheme must register with HMRC from 13th July 2020 – see for all the detail you will need to provide – https://www.gov.uk/guidance/register-your-establishment-for-the-eat-out-to-help-out-scheme

 

 

  • Eligible businesses must:
    • Sell food for immediate consumption on premises.
    • Provide or share dining area for meals to be consumed on site.
    • Be registered with the local authority as a food business on 7th July 2020.
  • Businesses include:
    • Restaurants.
    • Cafés.
    • Pubs.
    • Hotel restaurants.
    • Restaurants and cafes within tourist attractions, holiday sites and leisure facilities.
    • Dining rooms within members’ clubs.
    • Workplace and school canteens.
    • Dining cars on trains (do they still exist??).
  • The discount applies even if the food/drink is consumed outdoors – but must be on your (or shared with other food outlets) premises.
  • Not eligible:
    • Catering service e.g. weddings.
    • Breakfast when sold as part of Bed and Breakfast package – (Breakfast sold separately is eligible).
    • Service charge on a bill.
  • Where there is more than one diner any discount calculation is worked out on the group as a whole not individually.
  • If the establishment offers their own discounts these must be taken off before the Eat Out to Help Out discount is calculated.
  • Contact us if you want details of how to calculate the discount.
  • Taking away a doggy bag still counts for the discount!
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