All the important information you need to know
The chancellor said that Britain was entering the second phase of the government’s economic response but the job of responding to the Covid-19 crisis had only just begun.
VAT is being reduced from 20% to 5% for the hospitality and tourism sectors for six months so businesses offering food and accommodation as well as attractions he hopes are already more attractive to customers.
To further encourage eating out an inventive new scheme was also announced offering a 50% discount per person up to a maximum of £10 to a meal if enjoyed at an establishment from Monday to Wednesday from August 1st 2020.
He also confirmed that the Coronavirus Job Retention Scheme (CJRS) would definitely be closing on October 31st but sought to alleviate any potential job losses by offering a £1,000 bonus to companies for every staff member they brought back into regular employment.
He hailed the scheme as a success noting that 1.1 million companies had made use of it and 9.4 million positions had been furloughed as a result which could otherwise have been lost outright.
He said: “Leaving the furlough scheme open forever gives people false hope that it will always be possible to return to the jobs they had before.”
There was some action on creating new jobs by promising to double the number of Jobcentre work coaches and the announcement of the Kickstart job creation scheme which would see 350,000 fully-funded six-month job placements for 18 to 24 year olds.
We know the price – but what’s the cost?
This is part of his announced three point strategy to support, protect and retain jobs.
Additionally, apprenticeship would be supported with bonuses for companies. Firms would receive a £2,000 payment for every apprentice they took on (£1,500 for apprentices aged over 25).
As usual with any attractive financial offer, it pays to read the small print as there are one or two speed bumps along the road to recovery.
It emerged that a brief 15-day consultation on draft legislation to introduce rules on the taxation of coronavirus business support grants closed in June and is being carried forward.
What this means is that it grants HMRC powers to tax the Retail and Hospitality Grant Scheme, the Small Business Grant Scheme and the Coronavirus Job Retention Scheme along with the Coronavirus self-employment Income Support Scheme (CSISS).
It would also empower HMRC to recover payments from recipients of CSISS or CJRS if it deems them ineligible to have received them or if CJRS payments hadn’t been used to pay employees, make pension contributions, pay PAYE or NICs. This will be extremely easy to check on their side. If you have claimed the furlough grant, but then not made the scheduled PAYE/NIC payment on time, they may look to open an investigation.
They also threaten further penalties for deliberate non-compliance and state that further provisions may be included in the final legislation when tabled.
The first examples of this were announced yesterday with the first arrests made in alleged Furlough fraud investigations in the West Midlands.
Richard Las, acting director of the HMRC’s Fraud Investigation Service said: “The Coronavirus Job Retention Scheme is part of the collective national effort to protect jobs. The vast majority of employers will have used the CJRS responsibly, but we will not hesitate to act on reports of abuse of the scheme.
“This is taxpayer’s money and any claim that proves to be fraudulent limits our ability to support people and deprives public services of essential funding.
“As usual, we have built steps in to prevent mistakes and fraud happening in the first place, but anyone who is concerned that their employer might be abusing the scheme should report it to HMRC online.”
If the last few months have been rough then the rest of 2020 and into 2021 look just as stormy even with temporary support measures.
There is always an opportunity within a crisis and this might be the chance to reconfigure your business’s financial situation to withstand an even bigger storm than the one that’s currently blowing down every high street and shopping centre in the UK.
Get in touch with us today and one of our experienced team of expert advisors will arrange a FREE, convenient initial consultation whenever you want one.
They will quickly get appraised of your situation, your circumstances and the issues you’re facing and can work with you on the best way to deal with them.
We don’t know what the future holds or what’s going to happen economically but we do know that the earlier you look for advice, the more options and maneuverability you’ll have.