Summer Statement Summary - Hospitality & Tourism

In the Summer Statement from the government on the 8th July there were some important announcements. These points particularly affect employers, future employers and businesses in the hospitality & tourist industry. Detail will unfold over the coming days and weeks but these are the main points:

1. JOB RETENTION BONUS - Employers that bring back an employee that was furloughed and continuously employ them through to January 2021 will be paid a government bonus of £1000 per employee. Employees must be gainfully employed during this period and paid at least £520 per month - on average - from Nov 20 to Jan 21. All furloughed employees returned to work in this way will be available for the £1000 bonus. You can claim the bonus in Feb 21 once your RTI has been received by HMRC for Jan 21.

2. KICKSTART SCHEME - This scheme will pay employers to create new jobs and train 16 to 24 year olds, they must be employed for a minimum of 25 hours per week and paid at least national minimum wage. The grant will pay the wages or up to £6000 for the first 6 months. There is no cap on the number of jobs you might wish to create.

3. APPRENTICESHIPS - For the next 6 months the government will pay employers £2000 if they create a new apprenticeship position or £1000 for a new trainee. Also, there will be a new bonus for those taking on over 25's of £1500 per position.

4. VAT REDUCTION FOR HOSPITALITY & TOURISM - for the next 6 months vat charged on food and non-alcoholic drinks, accommodation and admission to attractions (including eat-in or takeaway food in restaurants, cafes, pubs) will be reduced from 20% to 5%. This means you will need to charge 20% VAT on alcohol not 5%. This will apply from 15 July 2020 to 12 Jan 2021. It is vital that businesses operating in these sectors check their tills so that the correct vat rate is applied. This is potentially going to be a nightmare if care is not taken, you will need to ensure that your tills are set correctly and careful records kept and of course, VAT returns are prepared correctly.

Other changes announced on the 8th July that may be of interest are as follows:

• Stamp duty will be nil on purchases up to £500,000 from today until March 21
• Green homes voucher scheme to make private homes more energy efficient up to £5000 per household
• "Eat out to help out" scheme - every diner will receive 50% discount up to £10 per head if they eat out Monday to Wednesday at a participating venue in August. This applies to all eat in meals and non alcoholic drinks. The pub / restaurant / cafe does need to register for the scheme

The detail of the various schemes as described about will be released over the next few days and months so we will keep you posted.

Whilst writing don't forget also:

• You need to claim by 31 July for employees furloughed on or before 30 June
• From 1 August the government grant won't cover national insurance and pension contributions for furloughed employees, just the wages element