Budget no.2 of 2020

Can't remember what he droned about in the March Budget, but it was swept away in the tsunami of covid the very next week.

Ever since then the Chancellor has been desperately pulling every lever he can, like a frightened passenger trying to pull a plane with a dead pilot out of a nosedive. Even though the government only permitted pubs/hospitality to reopen on 4th July, the Chancellor has already panicked just four days later, and decided the sector needed extra help from him to climb out of covid armageddon.

Main points of the Chancellor's statement

Furlough

The scheme will "definitely end on 31st October". From 1st August the help is tapering, so employers gradually pay more of the wages, but also you can bring staff back part-time, so it's more flexible.

Thereafter if an employer retains a member of staff until January 2021, the employer will get £1,000 cheque for each person so retained. E.g. you have 4 staff, sack one on 31.7.20, and keep the rest until end January 2021 to get £3k etc.

VAT change

Temporary 5% of hospitality/entertainment venues for 6 months, but only starting on 15th July for some unknown reason. Taxpayers will need outstanding accountants to help them do their July20-Jan21 VAT returns doing all the apportionments out of various till systems.

£10 off August meals out, mon-wed

This was an off the wall announcement! not sure what he thought this will do, but it's a good attention-grabber for sure. We'll soon see what restaurants put together as their special offers to take advantage of this.

Stamp Duty

SDLT threshold raised from £125/250k to £500k, even though the property market says it's fine at the moment.

Chancellor has announced that immediately the stamp duty threshold will increase from £125,000 to £500,000 until 31 March 2021. Seems this will help all buyers, not just the first time buyers. Shame about completions that went through last week.

Green Stuff

Grants of up to £5,000 per household for projects to make homes more energy efficient in England. Government will match owners spending on a £2 for £1 for most homes. But check the details when they come out.

Apprentices

He's announced a £2bn fund to pay for six-month work placements for 16 to 24-year-olds. BUT they must be on universal credit before getting the placement. It's limited to the usual working week for young people - 25 hours per week, and it's only on minimum wage, plus employers NIC and pension contributions.

There's a £1,000 grant per trainee for employers who take on new trainees aged 16-24.

But if you take them on as apprentices you get £2,000 grant, dropping to £1,500 for those over 25, for six months starting 1 August.

There will be more staff at jobcentres to advise on vacancies, and some other minor programmes to help people get jobs. The trouble is that if there's 4m jobs for 6m people the outcome has to be....

And of course do notice that some sectors are still shut down like entertainment and gyms. Not sure how the "medical advice to the government" explains this distinction.

PS. These notes only apply to England, if your'e elsewhere you're not one of our clients, and as we are subsidizing all your schemes, you can do your own notes.