Chancellor Announces Job Retention Bonus
Job Retention Bonus Scheme announced in latest Government update
Yesterday (8th July 2020), Chancellor Rishi Sunak revealed the next steps in the UK’s economic Coronavirus recovery plan. Whilst there was nothing in the announcement that was directly aimed at contractors, it did include the introduction of the Job Retention Bonus, in addition to various new schemes that are set to kickstart the hospitality and real estate industries. Below is a summary of the latest announcement.
Job Retention Bonus
Following the Coronavirus Job Retention Scheme (CJRS), which allowed employers to claim 80% of their employees’ wages (up to £2,500 per month), the Government has announced their next step to economic recovery – the Job Retention Bonus.
The Job Retention Bonus is a one-off payment to employers who have used the CJRS scheme, of £1,000 for each furloughed employee who remains continuously employed until 31st January 2021. The bonus will provide additional support to help employers retain employees.
To be eligible, employees will need to:
- Earn at least £520 per month (at least the Lower Earnings Limit) on average for November, December, and January
- Have been furloughed by their employer at any point, and legitimately claimed for under the Coronavirus Job Retention Scheme
- Have been continuously employed by you up until at least 31 January 2021.
Employers will be able to claim the bonus from February 2021, once accurate RTI (Real Time Information) data relating to 31 January 2021 has been received.
More information about this scheme will be available later this month, and the Government is set to release full guidance in Autumn 2020.
The Eat Out to Help Out Scheme
Mr Sunak also announced measures designed to aid recovery in the hospitality industry. The first of these is the Eat Out to Help Out Scheme which gives diners the opportunity to get 50% off meals and non-alcoholic drinks, up to £10 per person, when eating at participating restaurants, bars, cafes, and other registered establishments. This scheme will run throughout August, and is available every Monday, Tuesday, and Wednesday.
Another provision made within the hospitality sector is a reduction in VAT. From 15 July 2020 until 12 January 2021, the UK Government will cut VAT from 20% to 5% on any eat-in or hot takeaway food and drinks from restaurants, cafes, and pubs, excluding alcohol. This VAT reduction also applies to all holiday accommodation in hotels, B&Bs, campsites, and caravan sites, as well as attractions such as cinemas, theme parks, and zoos.
To assist the real estate industry, the Chancellor announced an increase in the Stamp Duty Land Tax (SDLT) threshold in England and Northern Ireland. This will increase the threshold under which no SDLT is paid on the purchase of a main home from £125,000 to £500,000. This reduction will take immediate effect until 31 March 2021.
Important Dates for CJRS and Furlough
While these were the main updates announced by Mr Sunak yesterday, it is important to be aware of some upcoming dates on the CJRS scheme that might affect you:
- You must claim by 31st July for employees who were furloughed through the Coronavirus Job Retention Scheme for periods ending on or before 30th June.
- From 1st July the CJRS scheme operates in a more flexible way, intended to allow some employers to permit a ‘part time’ return to work for some furloughed staff.
- From August 1st, employers will no longer be able to use a CJRS grant to cover National Insurance and pension contributions for furloughed employees. You can submit your August claim in advance, from 20th July.
- The amount of furlough pay that can be reclaimed falls in September and again in October, and the scheme is scheduled to end on 31st October.
The Government has also developed an online calculator to help you work out what you can claim for claims ending on or before 31st July. From 10th July, you will also be able to use the calculator to work out claims ending on or before 31st August.
Here to Help
No matter your situation, we are here to help you manage your way through the Coronavirus pandemic. If you have any queries relating to your limited company/PSC finances or would like some more information about any of the above schemes, please get in touch and we will be happy to assist you.