Newsletter - July 2020
Business Support - SUMMER STATEMENT
The Chancellor, Rishi Sunak continued with his campaign to support the business and jobs community today, 8 July 2020, as firms engage with the disruption caused by the coronavirus outbreak and the measures taken to control infection.
The main thrust of his announcements during his Summer Economic update concerned his nominated Plan for Jobs 2020, details are listed below.
He also announced measures to support the hospitality and tourism industry including a novel voucher scheme and a temporary reduction in VAT. Again, details are provided in the following update.
In an attempt to boost the flagging property market Stamp Duty is being temporarily reduced in England and Northern Ireland. Separate announcements on this topic are awaited for Scotland and Wales who have their own Stamp Duty regimes.
Details of these announcements follow:
- Job Retention Bonus: employers that bring back an employee that was furloughed, and continuously employ them through to January 2021, will be paid a £1,000 government bonus per employee retained. Employees must be seen to be gainfully employed during this period and be paid at least £520 a month, on average, from November 2020 to January 2021. All furloughed employees returned to employment in this way will be available for the £1,000 bonus.
- Kickstart scheme: this new scheme will cover the wages (plus associated costs) of new jobs created for any 16 to 24-year-old - at risk of long-term unemployment - for six months. These will have to be new jobs, of at least 25 hours a week and paid the National Minimum Wage. Employers will need to offer kickstarters training and support to find a permanent job. Employers can apply to be part of this new scheme from next month – August 2020 with first jobs starting in the autumn. Government has made an initial £2bn available for this scheme, but there is no cap on the number of places made available.
- Apprenticeships: for the next six months government will pay employers to create new apprenticeships. The amount payable will be £2,000 for each apprentice. A new bonus to take on apprentices aged over 25 has also been announced. This will amount to £1,500 per appointment.
- Green jobs initiatives: as an incentive to create jobs in the green jobs’ market a number of new grants have been announced. From September 2020, homeowners and landlords in England will be able to apply for a grant to make their home more energy efficient. The £2bn Green Homes grant will cover at least two-thirds of the cost up to £5,000 per household. For low income households these grants will cover all costs up to £10,000. There will also be a further £1bn allocated to make public buildings greener.
- Boost for the housing market: Presently, in England and Northern Ireland (different amounts apply in the regions) no Stamp Duty Land Tax is payable on residential property purchases below £125,000. From today – for a temporary period to 31 March 2021 – this threshold is increased to £500,000. It is projected that this will reduce the average stamp duty bill by £4,500. Regional variations may apply. Purchasers buying a second residential property will still have to pay the 3% Stamp Duty Land Tax for property purchases up to £500,000.
- VAT reduction for hospitality and tourism: for the next six months VAT charged on food, accommodation and attractions (such as eat-in or takeaway food in restaurants, cafes, pubs, cinemas, theme parks and zoos) will see VAT reduced from 20% to 5%. This will apply from 15th July 2020 until 12th January 2021.
- Eat Out to Help Out discount: for the month of August 2020, meals eaten at any participating business Monday, Tuesday or Wednesday, will be 50% off up to a maximum discount of £10 per head including children. To access the discount businesses will need to register and can do so through a website to be opened next Monday, 13 July 2020. Businesses will be able to claim the money back weekly with the money in their bank accounts within 5 working days.
As we manage the cautious steps to emerge from lock-down, still wary of COVID-19, the new incentives announced by Rishi Sunak should be welcomed.
As more details emerge on the various schemes announced today they will be published accordingly.
We hope you find the articles in this month’s issue of our newsletter of interest.
New support for High Street
Brexit – no extension to transition period
Parents returning from paternity or maternal leave
Tax Diary July/August 2020
Business Support - Unwinding Furlough
Last month we commented on the changes to the Coronavirus Job Retention Scheme (CJRS) that commenced at the beginning of this month (1 July 2020).
Now that we have the option to bring back employees on a part-time basis and still have a measure of support for their unpaid time, what considerations should we consider when planning the effects of the gradual unwinding of the CJRS?
Here are a few issues you may need to consider:
- Based on your present circumstances, what turnover levels are you likely to achieve from the end of this month?
- Apart from staff costs, what are your other fixed cost projections?
- You will need to account for the gradual impact of presently furloughed payroll costs as the CJRS unwinds towards close-down 31 October 2020.
- And last, but not least, have you created formal cash-flow and profit forecasts?
Armed with this information, you can then consider the combination of staffing levels that will allow you to at least breakeven from a profit perspective.
Planning is obviously paramount. If you have your account’s updated in real-time – using cloud based software – this will provide you with much needed data on which to base your decisions.
The UK economy seems set to break all records for reduction in output. As the 20% drop in May illustrates, we are descending into uncharted territory.
If you need help creating the necessary “what-if” planning reports, please call. There has never been more pressing need to make informed decisions. Delaying or ignoring this need is rather like driving blind-fold.
Business Support - New Support for High Street
|A package of support to help high streets to get back on their feet was launched 12 June 2020. This announcement was made just days before shops were allowed to reopen on 15 June.
The High Streets Task Force will provide access to cutting-edge tools, training, information and advice for high streets across England as part of the government’s efforts to get shops open and back in business.
This support is open to local councils and all organisations involved with high streets and will include free access to online training programmes, webinars, data and intelligence on topics including recovery planning and coordination, public space and place marketing.
The support will form one part of the Task Force’s 4-year programme which will focus on the long-term transformation of town and city centres and helping communities reimagine and revitalise their high streets.
Customs Duties - Brexit – no extension to transition period
It is now confirmed that the UK will neither accept nor seek any extension to the Transition Period.
From 1 January 2020, the UK will have the autonomy to introduce its own approach to goods imported to GB from the EU.
Recognising the impact of coronavirus on businesses’ ability to prepare, and following the announcement in February that the UK would implement full border controls on imports coming into GB from the EU, the UK has taken the decision to introduce the new border controls in three stages up until 1 July 2021. This flexible and pragmatic approach will give industry extra time to make necessary arrangements. The stages are:
- From January 2021: Traders importing standard goods, covering everything from clothes to electronics, will need to prepare for basic customs requirements, such as keeping sufficient records of imported goods, and will have up to six months to complete customs declarations. While tariffs will need to be paid on all imports, payments can be deferred until the customs declaration has been made. There will be checks on controlled goods like alcohol and tobacco. Businesses will also need to consider how they account for VAT on imported goods. There will also be physical checks at the point of destination or other approved premises on all high risk live animals and plants.
- From April 2021: All products of animal origin (POAO) – for example meat, pet food, honey, milk or egg products – and all regulated plants and plant products will also require pre-notification and the relevant health documentation.
- From July 2021: Traders moving all goods will have to make declarations at the point of importation and pay relevant tariffs. Full Safety and Security declarations will be required, while for SPS commodities there will be an increase in physical checks and the taking of samples: checks for animals, plants and their products will now take place at GB Border Control Posts.
Employment Law - Parents returning from paternity or maternal leave
|One aspect of the 1 July changes to the CJRS was the closing date to new entrants was set as 30 June 2020. This disadvantaged parents who had been on extended parental or maternal leave in recent months and were intending to return to work after 30 June.
The government has now confirmed that parents on statutory maternity and paternity leave who return to work in the coming months, after a long period of absence, will be permitted to be furloughed.
This will only apply where they work for an employer who has previously furloughed employees.
Tax Diary - July/August 2020
1 July 2020 - Due date for Corporation Tax due for the year ended 30 September 2019.
6 July 2020 - Complete and submit forms P11D return of benefits and expenses and P11D(b) return of Class 1A NICs.
19 July 2020 - Pay Class 1A NICs (by the 22 July 2020 if paid electronically).
19 July 2020 - PAYE and NIC deductions due for month ended 5 July 2020. (If you pay your tax electronically the due date is 22 July 2020)
19 July 2020 - Filing deadline for the CIS300 monthly return for the month ended 5 July 2020.
19 July 2020 - CIS tax deducted for the month ended 5 July 2020 is payable by today.
1 August 2020 - Due date for Corporation Tax due for the year ended 31 October 2019.
19 August 2020 - PAYE and NIC deductions due for month ended 5 August 2020. (If you pay your tax electronically the due date is 22 August 2020)
31 July 2020 – Self-assessment second payment on account for 2019-20 is due. The government has announced measures that will allow many tax payers to delay this payment until January 2021, if they wish.
19 August 2020 - Filing deadline for the CIS300 monthly return for the month ended 5 August 2020.
19 August 2020 - CIS tax deducted for the month ended 5 August 2020 is payable by today.
Units 16-18, The Boscombe Centre, Mills Way, Amesbury, Salisbury, Wiltshire, SP4 7SD
Tel: 01980 623998 Fax: 01980 624584.
Howdenwhite LLP is a limited liability partnership, registered for VAT under reference 813 1355 63.
The Practice designated member of the firm is a member of the Association of Chartered Certified Accountants (ACCA). This body has its headquarters in the UK and its rules of professional conduct can be obtained from its web site.
DISCLAIMER - PLEASE NOTE: The ideas shared with you in this newsletter are intended to inform rather than advise. Taxpayers’ circumstances do vary and if you feel that tax strategies we have outlined may be beneficial it is important that you contact us before implementation. If you do or do not take action as a result of reading this newsletter, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.