Coronavirus support for businesses
Business owners must be aware of the regular updates from the Government on the support available to them as a result of the Covid-19 situation. Amongst a raft of further measures, the Chancellor has announced a new Job Retention Bonus to encourage firms to keep on furloughed workers.
The Government will introduce a one-off payment of £1,000 to UK employers for every furloughed employee who remains continuously employed through to the end of January 2021. Employees must earn above the Lower Earnings Limit (£520 per month) on average between the end of the Coronavirus Job Retention Scheme and the end of January 2021. Payments will be made from February 2021. Further detail about the scheme will be announced by the end of July.
Employers should note however that this new scheme has been subject to some criticism and there may be some lobbying to change the scheme. It may therefore be adapted or reviewed – so employers must keep up to date with these changes to ensure that only legitimate claims are made.
The Government is also trying to support the hospitality industry with a number of measures, notably:
Temporary VAT cut for food and non-alcoholic drinks – from 15 July 2020 to 12 January 2021, to support businesses and jobs in the hospitality sector, the reduced (5%) rate of VAT will apply to supplies of food and non-alcoholic drinks from restaurants, pubs, bars, cafés and similar premises across the UK. Further guidance on the scope of this relief will be published by HMRC in the coming days.
Eat Out to Help Out scheme to encourage people to return to eating out. This will entitle every diner to a 50% discount of up to £10 per head on their meal, at any participating restaurant, café, pub or other eligible food service establishment. The discount can be used unlimited times and will be valid Monday to Wednesday on any eat-in meal (including on non-alcoholic drinks) for the entire month of August 2020 across the UK. Participating establishments will be fully reimbursed for the 50% discount.
Note that in all of the above cases, eligible businesses must apply to HMRC – so it is important to ensure that specialist advice is taken. HMRC is getting tough on fraudulent applications – even an innocent, but incorrect, application could lead to difficulties for businesses.
To discuss this or any other business-related matter, contact us.