The Chancellor, Rishi Sunak, delivered the mini-Budget on 8th July 2020 in a response to the Covid-19 outbreak.
The key points of the budget 2020 are as follows:
The threshold for stamp duty will increase from £125,000 to £500,000. The cut will be temporary, running until 31 March 2021, and will take effect immediately.
VAT will be cut from the current rate of 20% to 5% for the next six months on food, accommodation and attractions. The cut begins on Wednesday 15 July and will last until 12 January 2021. 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.
It is not compulsory to pass on this VAT saving to customers by way of a menu price reduction. Operators will need to update their EPOS to record the VAT treatment of food, non-alcoholic and alcoholic drinks appropriately. If your EPOS has an accounting integration such as Xero, you will need to review or update the mapping to ensure there is an equivalent 5% VAT rate, or the sync may fail. Read further HMRC guidance.
Job Retention Scheme
The Coronavirus Job Retention Scheme (CJRS) will wind down flexibly and gradually until the end of October. A new Jobs Retention Bonus will provide a one-off payment of £1,000 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.
Eat Out to Help Out
The Chancellor announced an “Eat Out to Help Out” discount to encourage consumers to spend at restaurants and cafés. Food and drinks consumed at any participating businesses, from Mondays to Wednesdays from 3 August to 31 August 2020, will be charged at 50% off up to a maximum discount of £10 per head for everyone, including children. Alcoholic drinks and service charges are excluded from the discount. Participating establishments will be fully reimbursed for the 50% discount. Operators must register from 13 July 2020 for each site. Reimbursement claims can be submitted from 7 August to 30 September. Operators must keep records of a) total number of people who have used the scheme b) total value of transactions under the scheme and c) total amount of discounts given. Operators should update their EPOS to include at Out To Help Out as a discount item. VAT is applicable on the full amount of the customers’ bills, and any money you receive through the scheme will be treated as taxable income.
Apprenticeships will be supported by bonuses for companies. Firms will get a payment of £2,000 for each apprentice they take on. Companies taking on apprentices aged over 25 will be given £1,500.
Vouchers worth £5,000 and up to £10,000 will be made available out of a £2bn pot to retrofit homes with insulation, helping to cut carbon emissions.