What the Chancellor’s Mini Budget Means for Small Businesses
The Chancellor has unveiled a £30bn plan to protect jobs and boost the economy in the wake of the coronavirus pandemic, but what will this ‘mini budget’ mean for contractors’ small businesses in the UK?
£1,000 furlough bonus
With the Coronavirus Job Retention Scheme set to finish at the end of October, the new Job Retention Bonus will give a one-time payment to employers that successfully bring furloughed employees back to work.
This bonus will be worth £1,000 per returning employee, as long as they are paid a minimum salary of £520 per month between November 2020, when the job retention scheme ends, and January 2021.
If you are a limited company director and you get a salary from your company, you should qualify for the bonus if you bring yourself back from furlough.
VAT cut in hospitality and tourism
A temporary reduction in VAT for hospitality businesses, accommodation and attractions could be a shot in the arm for sectors that have been hard hit by the pandemic.
From 15 July to 12 January, a reduced VAT rate of 5% will apply to food and non-alcoholic drinks sold in restaurants, pubs, bars, cafes and takeaways. VAT will also be cut from its current level of 20% for accommodation and admission to attractions.
If you use cloud accounting software like FreeAgent or Xero to manage your company’s books, this change in VAT will be easy to apply.
For more information or advice, speak to a member of our team today. Call: 0808 281 0303.
Kickstart jobs scheme
A new kickstart scheme designed to boost employment for out-of-work young people could help small operators access subsidised workers.
The scheme provides an incentive for employers to create six-month work placement for people aged 16-24 and currently on Universal Credit. The aim of the policy is to avoid long term unemployment for people in this group.
Employers will be able to claim funding covering 100% of the relevant National Minimum Wage for 25 hours a week, plus National Insurance contributions and minimum pension contributions for the work placements.
As well as the VAT cut for businesses in the hospitality sector, food service establishments including restaurants, pubs and cafes will give diners a 50% discount on meals and non-alcoholic drinks purchased on Mondays, Tuesdays, and Wednesdays in August.
The government will reimburse participating businesses directly for the 50% discount provided to customers through the scheme.
For more information about cloud accounting software and accountancy support, speak to a member of the CloudAccountant team today. Call: 0800 281 0303.