Budget 2020

What does the summer statement mean for my business?

UK Chancellor of the Exchequer, Rishi Sunak, has released a summer statement announcing a £30 billion relief package aimed at minimising the economic impact caused by the COVID-19 pandemic.

The extensive measures are set to have a significant impact on UK businesses, with employment retention and changes to VAT dominating proceedings.

At this point, we understand you will have many questions. How will the changes affect your business? What grants are available to you? And how do you claim them?

Luckily for you, our experts are on hand to answer your questions.

I still have staff on furlough leave, has the scheme been extended? And what funding is available to me?

For those businesses that still have staff on furlough leave, it was a mixed bag of results.

The Chancellor has confirmed that the scheme will “wind down flexibly and gradually until the end of October”, reinforcing the importance that businesses start planning for the return of staff from 1st November 2020.

On a more positive note, aware of the reliance many businesses have on the current scheme (and a desire to minimise UK unemployment levels), the government has announced a new jobs retention bonus. The £9 billion pledge will see businesses paid £1,000 for each furloughed member of staff they retain.

To be eligible for the bonus, you must first ensure that each worker meets the following criteria:

  • The staff member must still be in employment by the end of January.
  • The worker must have been continuously employed (and earn an average of more than £520 per month) in November, December, and January.

You can now submit claims for periods starting on or after 1 July via the Government’s website. Please note that 31 July is the last day that you can submit claims for periods ending on or before 30 June.

What changes have been made to VAT rates? And do they apply to me?

The Chancellor delivered some positives news on VAT rates for businesses; however, these changes are limited to those operating within the hospitality sector.

Starting from 15th July 2020, and lasting for the next six months, VAT will be slashed from 20% to 5% for the hospitality and tourism sector. It is estimated that the reduction will help 100,000 UK businesses including 40,000 pubs, 28,000 restaurants, 15,000 cafes and 7,500 hotels, as well as tourist attractions and caravan parks, according to analysis by Altus Group, a property adviser.

I am looking to expand my current workforce, but I am concerned due to the current economic outlook. What incentives have been introduced to help me hire?   

For businesses looking to expand their workforce, but deterred by future uncertainty, the government has announced their new £2 billion ‘kickstart scheme’, designed to encourage business owners to hire young people.

The government has pledged to provide businesses with a £1,000 grant for each new work experience place (known as a traineeship) they offer to 16-to-24-year-olds claiming Universal Credit. As further encouragement, the government have also assured firms that they will directly pay the worker the National Minimum Wage for 25 hours a week for the first six months of their placement.

Businesses can apply to be part of the scheme from next month. If you’re interested in the scheme, don’t forget to regularly check the government’s website for further updates.

The 2020 summer statement has also revealed an upgrade on the current apprenticeship grants available. From August to January, any firm that hires an apprentice aged 16 to 24 will receive a payment of £2,000, with the figure dropping to £1,500 for those that hire new apprentices aged 25 and over.

Following the publication of the government’s new ‘plan for jobs’ proposal, it has been confirmed that the above grants will be in addition to the current £1,000 businesses are paid for hiring apprentices between the ages of 16 to 18.

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For the latest business news and advice, plus informative tips on how to navigate your business through these troubling times, please visit our dedicated business and COVID-19 support hubs.

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Paul JohnsonGroup Financial Director

Paul Johnson is very much a home-grown talent.

He joined Great Annual Savings Group in its infancy, fresh from a youth career as a professional footballer with Hartlepool United.  He quickly established a reputation within the business and aced all required accountancy qualifications in the space of four years to become the Group’s Management Accountant.

Several successful projects later, Paul was promoted to Head of Finance.  When the former FD left GAS, he took on the mantle of the business’ most senior finance professional; boasting a string of incredible achievements all under the age of 30.

Quote:

“I have witnessed phenomenal growth at the Group over the many years I’ve worked here and I’m looking forward to guiding the Group into an exciting new chapter.”

Interesting fact:

Paul made his professional debut for Hartlepool United against Bournemouth in the Football League.  Some say Danny Ings still resides in his pocket to this day.

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