2020 Summer Budget
The Chancellor announced several changes to tax rates and introduced new measures in his 2020 Summer Statement with the aim of easing the pressure on the sectors most severely affected by the COVID-19 crisis. These announcements are likely to directly affect not only SMEs within key sectors, but also house buyers any business that has furloughed employees.
Hospitality VAT Rate
VAT is to be reduced for all VAT registered companies operating within the hospitality sector from 20% to 5% from Wednesday 15th July 2020 to 12th January 2021. This will affect all of the following:
Stamp Duty Land Tax (STLD)
The exemption for Stamp Duty Land Tax (SDLT) on residential property sales in England and Northern Ireland is currently set at £125,000. From 8th July 2020 until 31st March 2021, this will be increased to £500,000, reducing the cost of moving house by thousands. The positive effect of this change will be significant for almost all house buyers and, potentially, breathe some life back into the struggling housing market.
A £1,000 per employee bonus will be given to employers who bring their staff back from furlough and keep them in work for the next 6 months (i.e. until the end of January 2021). This is only applicable to employees earning over £520 per month on average between now and January 2021, with payments being made to employers from February 2021.
Discount on eating out
During the month of August, all UK citizens will be given an ‘eat out to help out’ discount worth up to £10 per head, each time they eat at a restaurant on a Monday, Tuesday or Wednesday. Businesses will need to register through a website, which will be open from next Monday (13th July 2020).
Payments for apprentices
The government will fund employers who provide trainees aged 16-24 with work experience, at a rate of £1,000 per trainee.
In addition, there will also be £2,000 per apprentice for those aged under 25 and £1,500 per apprentice for those aged over 25, from 1st August 2020 to 31st January 2021. These payments will be in addition to the existing £1,000 payment the government already provides for new 16-18 year-old apprentices.
Redwood Accountants specialises in providing accountancy & tax services to SMEs and has supported many clients across a range of sectors throughout the COVID-19 crisis. Book a free consultation today to talk about how we can help you during this difficult time.