COVID-19 Emergency Measures (10.07.2020)
Employers
Coronavirus job retention bonus
The Chancellor confirmed that Coronavirus Job Retention Scheme (CJRS) will be flexibly and gradually wound down through to October as previously announced. Broadly, the CJRS scheme closed to new furloughed employees on 10 June 2020 with last claims for periods ending 30 June to be made by 31 July. The flexible CJRS will close at the end of October.
To reward and incentivise employers to bring back employees, any employer who brings back a furloughed member of staff through to January 2021 will receive a £1,000 bonus per employee.
The bonus will be:
• a one-off payment of £1,000;
• to UK employers;
• for every furloughed employee who remains continuously employed through to 31 January 2021.
Employees must earn above the National Insurance lower earnings limit (£520 per month) on average between 31 October 2020 when the CJRS ends and the end of January 2021.
The bonus payments will be made from February 2021.
Further detail about the CJR bonus scheme will be announced by the end of July.
Support for younger workers
The new Kickstart Scheme will directly pay employers to create new jobs for any 16 to 24-year-old at risk of long-term unemployment. The jobs must be new jobs – with the funding conditional on the firm proving these jobs are additional.
The government will pay young people’s wages for six months, plus an amount for overheads, which will give employers a grant of around £6,500 for each employee taken on. The funding is conditional on these being new jobs, paid at national minimum wage and for at least 25 hours a week.
Employers will be able to apply from August.
In addition, the Government will pay employers £1,000 to take on new trainees, and for the next six months, the Government will pay employers to create new apprenticeships.
Businesses will be able to claim a new payment of £2,000 per apprentice, and there will be a brand-new bonus of £1,500 for businesses hiring apprentices aged 25 and over.
Further details of this are expected to emerge in near future.
Homeowners and Landlords
SDLT temporarily reduced
To help boost the housing market, there will be a temporary reduction in stamp duty land tax (SDLT) in England until 31 March 2021.
To achieve the reduction, the nil rate band threshold for SDLT payment has been increased from £125,000 to £500,000. This change applies with immediate effect but only applies until 31 March 2021.
Extension to capital gains filing ended
From the 6th April 2020 a new standalone capital gains tax return has been required to be submitted to HMRC within 30 days of sale, as well as a requirement to pay over any taxes owed within 30 days also.
The government suspended the need for this return and payment to be made within 30 days as part of the COVID-19 emergency measures that they have implement over the last few months but this suspension is now over.
This means that all property sales subject to capital gains tax between the 6th April 2020 and 30th June 2020 must be reported to HMRC by the 31st July 2020 at the latest to avoid being fined, as well as the tax paid.
From the 1st July 2020, the normal rules will apply and this must be reported and paid within 30 days of the date of sale.
The capital gain made on the property will also need to be declared on your personal tax return at the end of the year, although this does not mean you will be double taxed.
If you are considering disposing of properties that aren’t your principal private residence in the future we would strongly urge you to consider a brief tax planning exercise to ensure you are aware of the potential tax bill that will be payable. It would also be advisable to gather any documents relating to your purchase of that property to save time if, and when the property is sold. 30 days is not much time to get a return drafted and submitted. Those documents help reduce the capital gains tax payable.
Hospitality Businesses
VAT cut for hospitality sector
The Chancellor announced a six-month reduction in the VAT rate on supplies of food and non-alcoholic drinks from restaurants, pubs, bars and cafes, as well as to supplies of accommodation and admission to tourist attractions.
The rate cut from 20% to 5% will take effect on 15 July 2020 and will be in place until 12 January 2021 to support businesses and jobs in the hospitality sector across the UK.