Wheelers Words

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Jul 10, 2020

Wheelers Words: COVID-19: Job Retention Bonus and Support Updates

Job Retention Bonus

HMRC have announced a one-off payment of £1,000 to employers that have used the Coronavirus Job Retention Scheme (CJRS) for each furloughed employee who remains continuously employed until 31 January 2021. The bonus will provide additional support to retain employees.

To be eligible, employees will need to:

·       earn at least £520 per month (above the Lower Earnings Limit) on average for November, December and January

·       have been furloughed by you 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 data to 31 January has been received. More information about this scheme will be available by 31 July and full guidance will be published in the Autumn.

VAT Reduction

HMRC have announced they will cut VAT from 20% to 5% on the following supplies:

·       any eat-in or hot takeaway food and non-alcoholic drinks from restaurants, cafes and pubs. Alcohol is not included.

·       supplies of all holiday accommodation in hotels, B&Bs, campsites and caravan sites.

·       admission to attractions, including theme parks, zoos and cinemas

The period of reduction is from 15 July 2020 until 12 January 2021.

Further detailed guidance should be issued in the next few days. If you believe these changes may affect you, we suggest you consider adjustments required with respect to your software, till or accounting functions.

Eat out to help out scheme

To help support the hospitality industry, during August, diners can get 50% off Monday to Wednesday on meals and non-alcoholic drinks, up to £10 per person, when eating at participating restaurants, bars, cafes and other establishments that have registered.

If you run a business that wants to take part in the scheme, you will have to register through a website that opens on Monday 13 July.

Stamp Duty Land Tax (SDLT)

HMRC have implemented an increase in the Stamp Duty Land Tax (SDLT) threshold in England and Northern Ireland under which no SDLT is paid on the purchase of a main home from £125,000 to £500,000. The change is immediate, applying for completions, on or after 8 July and will apply until 31 March 2021.

Stamp Duty at 5% remains payable for residential purchases above £500,000 (up to £925,000), rising to 10% (£925,001 – £1,500,000) and 12% (over £1,500,000).

Anyone purchasing an additional residential property worth more £40,000 will still need to add a 3% stamp duty surcharge to their costs. For those subject to the additional 3% charge the 3% band will also increase to £500,000.

Flexible furlough

Employers who are flexibly furloughing employees should get a letter signed confirming their agreement to vary contracts. We have a template adapted from the ACAS website if you would like a copy, please let us know.

Self-Employment Income Support Scheme (SEISS) – Second grant

HMRC have extended the Self-Employment Income Support Scheme (SEISS) scheme so that eligible individuals are able to claim a second and final grant from 17 August 2020.

HMRC will work out your eligibility the same way as the first grant. If you make a claim for the second grant you will have to confirm your business has been adversely affected on or after 14 July 2020.

This grant will be a taxable grant worth 70% of your average monthly trading profits, paid out in a single instalment covering a further 3 months’ worth of profits, and capped at £6,570 in total.

Self-Employment Income Support Scheme (SEISS) – First grant

If you are eligible and your trade has been adversely affected, any applications for the first grant must on or before 13 July 2020 if you wish to claim this.

31 July payment on accounts

A reminder that taxpayers can choose to defer their payment on account due on 31 July 2020. There is no requirement to notify HMRC of this. If you choose to defer this payment it will be due on 31 January 2021.