Rishi’s New Plans: Supporting Jobs and VAT Rate Cut
Wed 15th July 2020
The Governments plan to kick start economic recovery following the Covid-19 pandemic
The Chancellor Rishi Sunak has unveiled new plans today helping businesses to retain jobs.
Written By Adiel Khan Business Adviser at South East Enterprise
The plan is the second part of three-phase financial support for economic recovery due to the coronavirus.
Let's take a look at some benefits for SME's
Job Retention Bonus
As part of this plan, there will be a 'Job Retention Bonus' introduced, which means that employers will receive a £1.000 bonus if the employees furloughed are still employed as of 31st Jan 2021.
Kick Start Scheme
A new £2 Billion 'Kick Start Scheme' will be launched to help young people on universal credit to get employment. The Kick Start Scheme will assure hundreds of thousands of new jobs created for young people between the ages of 16 - 24 who are at risk of long-term unemployment.
There will be funding available for employers who hire a young person on Universal Credit, for each job placement of 6 months they will receive 100% of the National Minimum wage for 25 hours a week. Employers will also be able to top the wage up.
Employment Support Scheme
The employment support Scheme will have an investment of £1.6 billion; there will be apprenticeships and training to help people looking for jobs.
The young people most affected by the crisis will benefit substantially.
The Key Feature:
A business will be eligible for £2,000 for each apprentice they take under the age of 25. It will be in addition to the current £1,000 apprentice scheme for 16 - 18-year-olds and under 25 with an education.
Businesses can sign up to the traineeship National Apprenticeship Service
Tourism and Hospitality VAT Rate Cut
A massive 80% of hospitality businesses stopped trading in April due to the pandemic, and 1.4 million employees found themselves furloughed. The highest number of any business sector in the U.K.
Ensuring there will be enough demand in this sector, there are several vital support programs put in place:
Eat Out to Help Out discount scheme
A VAT rate cut from 20% to 5%
The support has been put in place to ensure there is enough demand as businesses reopen after the pandemic. The scheme is to enable businesses to recover and install the confidence to protect jobs and rehire.
Eat Out to Help Out
The Eat Out to Help Out Scheme is in place to encourage people to return to eating out safely at restaurants and cafes. There will be a 50% discount for people for sit down meals at cafes, pubs and restaurants nationwide from Mon-Wed every week throughout August 2020.
VAT Rate Cut
There will be a VAT rate cut from the standard 20% to a reduced rate of 5% saving households on average £160 per year.
Both programs together will help kick start the industry as well as support 2.4 million staff and over 150,000 businesses recover due to the lockdown of COVID. The VAT rate reduction and Eat Out to Help Out is to give the companies confidence in retaining their employees as more people come through the door and business kicks off.