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Info Update 2020/39                                                        Issue Date: 09/07/2020
 
Chancellor's Summer Statement
 
As you may have seen in the media, Chancellor, Rishi Sunak, announced new support for employers and employees in his summer statement yesterday.

The aim of these new measures is to protect jobs, avoid mass youth unemployment and support the economy as the country moves into a new “normal” after the pandemic.

A summary of the main points which affect businesses are as follows:

Furlough and the job retention bonus
The Chancellor announced that the Government will pay a one-off bonus of £1,000 to employers for each of their furloughed employees who returns to work and remains continuously employed until 31st January 2021.

Further details of the scheme are expected, but the Chancellor already said that to be eligible, the employee must have been paid an average of £520 per month between November 2020 and January 2021.

The Chancellor reiterated that the Coronavirus Job Retention Scheme will not be extended and will finish at the end of October 2020.

New ‘kickstart’ jobs scheme
Employers who create a new job with a minimum of 25 hours per week for a person aged between 16 and 24-years-old who is at risk of long-term unemployment and claiming Universal Credit, will receive funding from Government.

The funding will cover the cost of the employee’s National Minimum Wage for 25 hours a week (plus the associated employer National Insurance contributions and employer minimum automatic enrolment contributions) for six months.

Employers will be required to provide training to the new employee and support them in gaining a permanent role. The scheme will run from August 2020 with jobs expected to start in the Autumn.

Apprenticeships and traineeships
From August 2020 to January 2021, the Government will pay employers to create new apprenticeships.

Employers will be eligible to receive £2,000 for each new apprentice they hire who is under the age of 25; and £1,500 for each new apprentice aged 25 or over. This is in addition to the existing £1,000 payment the government already provides for new 16 - 18-year-old apprentices and those aged under 25 with an Education, Health and Care Plan.

The Government also plans to triple participation in traineeships by funding employers who provide trainees with work experience at a rate of £1,000 per trainee.

VAT cuts for the service industry
VAT on food, accommodation and attractions will be cut from 20% to 5% until 12th January next year to support the hospitality and tourism sectors.

"Eat out to help out"
To encourage people to get back to restaurants and help save jobs, during month of August, consumers will be able to get 50% off a meal out, up to £10 off per head, at participating restaurants/eateries on Mondays to Wednesdays. The £10 can cover food and some soft drinks, but not alcohol. The food establishment will need to register on a website to participate in the scheme. Further details on how to participate and how the scheme will operate to be announced in due course.

We will, of course, keep you updated on any further announcements; in the meantime we wonder just how, and when, we’ll pay for all this unprecedented government largesse.
 
 
The advice and comment in this update is not meant to be an authoritative statement of the law. The articles and summaries should not be applied to any specific set of facts and circumstances without seeking further advice. Whilst every care is taken to ensure that the content is correct Sentient cannot accept responsibility for the accuracy of statements made nor the result of any actions taken by individuals after reading such.
 
 
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