Payroll
The Summer Economic Update
LoraMurphy ACIPP, CIPP policy and research officer, outlines the key announcements
O n 8 July, the Chancellor of the Exchequer, Rishi Sunak, delivered the Summer Economic Update and gave a speech which laid out a three- point plan: ● support people to find jobs
sector as well as the National Careers Service.
struggled during lockdown. ● Reduced rate of VAT – From 15 July to 12 January 2021, a reduced rate of 5% value added tax will be applied to supplies of food and non-alcoholic drinks from restaurants, pubs, bars, cafes and similar premises throughout the UK. This lower rate will also be applied to supplies of accommodation and admission to attractions. ● Eat out to help out scheme – To support approximately 130,000 businesses and help protect the jobs of their 1,800,000 employees, the government is implementing this scheme to encourage people to return to eating out. During August, diners on Monday to Wednesday will get a 50% discount of up to £10 per head on meals at any participating eligible food service establishment. The discount can be applied to any eat-in meal and non- alcoholic drink. ● Green homes grant – This grant will provide at least £2 for every £1 spent on making our homes more energy efficient. There will be a limit of £5,000 per household, but for those on lower incomes the scheme will fully fund emergency measures of up to £10,000 per household. ● Residential stamp duty land tax – The nil rate band of this tax will temporarily be increased, until 31 March 2021, from £125,000 to £500,000 in England and Northern Ireland. Defined by our response The Chancellor commended his plan to the Speaker of the House and finished with the statement: “For me, this has never just been a question of economics, but of values” adding that “We will not be defined by this crisis, but by our response to it”. He really could have been speaking directly to the payroll industry which has worked so hard to keep the UK paid. n
Kickstart scheme The Kickstart scheme aspires to create jobs for individuals aged between 16 and 24 who are on universal credit and who are at risk of long-term unemployment. The jobs will provide a six-month placement and the government will fund 100% of the national minimum wage (NMW) rate for 25 hours per week, in addition to the associated secondary (employer) class 1 National Insurance contributions (NICs) and employer minimum automatic enrolment contributions. To encourage employers to hire new apprentices, the government will make a payment of £2,000 to employers in England for any apprentices under the age of 25 they hire. Any employer hiring apprentices over the age of 25 will receive a £1,500 payment. This applies from 1 August 2020 up until 31 January 2021. These payments are in addition to the £1,000 payment currently available to employers for new 16–18-year-old apprentices, and anyone aged under 25 with an education, health and care plan. The government will also provide employers who give trainees work experience, a £1,000 payment per trainee. Other measures Moving on from the creation of employment for young people the Chancellor turned to further short- term initiatives aimed at increasing our spending and boosting sectors that have
● create jobs ● protect jobs.
With this the government’s A Plan for Jobs 2020 (https://bit.ly/3fvvdGJ) was launched. Job retention bonus Following on from the coronavirus job retention scheme (CJRS), which will close at the end of October 2020, the job retention bonus will provide a one-off payment of £1,000 to UK employers for every employee who is brought back from furlough and continuously employed through November, December and up until the end of January 2021. To qualify, employers must pay employees an average of £520 each month. Payments will be made to employers from February 2021. The aim of the bonus is to incentivise employers to retain furloughed employees, not just to get the bonus, but in a bid to provide decent work. If used to its full capacity it will cost over £9 billion. Supporting jobs In addition to the creation of new jobs a number of measures were revealed that will result in an increased capacity to support people in their search for work. These will include a blend of one-to- one support and increased emphasis on training and upskilling using resources through the Job Centre and the private
...a one-off payment of £1,000 to UK employers for every employee who is brought back from furlough and continuously employed...
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| Professional in Payroll, Pensions and Reward |
Issue 63 | September 2020
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