Hot on the heels of the flexible furlough scheme starting last week (from 1 July), the Chancellor, Rishi Sunak, yesterday delivered his Summer Economic Statement and announced the government’s “Plan for Jobs 2020” package.
This being a new raft of measures to help employers protect, create and supporting jobs moving forwards, as the UK economy seeks to continue its’ recovery from this COVID-19 pandemic. Here, I have summarised the main measures your business needs to know about and be aware of.
Job Retention Bonus
A one off £1,000 bonus will be paid to UK employers for every furloughed employed who is brought back to work and remains continuously employed through to the end of January 2021.
To be eligible, employees must earn above the lower earning limit for National Insurance (£520 per month) on average between the end of the Coronavirus Job Retention Scheme on 31 October and the end of January 2021.
Payments will be made to employers from February 2021. Further detail about the scheme will be announced by the end of July.
Support for young workers – apprenticeships and training
A new Kickstart scheme will directly pay employers to create new "good quality" jobs, with training and support for any 16 to 24 year olds claiming Universal Credit and at risk of long-term unemployment.
The funding available for each job will cover 100% of the relevant National Minimum Wage for 25 hours a week, plus the employer’s associated National Insurance and minimum pension contributions. Employers will be able to top this wage up. There is no cap on the number of kickstarted jobs that may be created.
Other support measures include:
- High quality traineeships for young people, where the government will fund employers who take on new trainees aged 16 to 24, at a rate of £1,000 per trainee – with the aim of tripling trainee numbers.
- Businesses being given £2,000 for each new apprentice they hire under the age of 25 and £1,500 for each new apprentice they hire aged 25 and over, from 1 August 2020 to 31 January 2021. These payments will be in addition to the existing £1,000 payment the government already provides for new 16 to 18 year old apprentices, and those aged under 25 with an Education, Health and Care Plan – where that applies.
- Investment is also being made in the number of sector-based work academy placements, work coaches at job centres and the work of the National Careers Service.
- £150m extra for the Flexible Support Fund, which provides help for jobseekers.
- £101m to fund studies for 18 to 19 year olds in England unable to find work.
“Eat out to Help Out” discount scheme
For those businesses in the hospitality sector, namely pubs, restaurants, cafes and bars. To encourage people to return to eating out, this scheme offers 50% discount for every diner eating and drinking (non-alcoholic drinks only), up to £10 per head, from Monday to Wednesday throughout August 2020. The discount can be used unlimited times during these days.
Participating businesses will be fully reimbursed for the 50% discount.
Six-month VAT cut for restaurants, hotels and attractions
From 15 July to 12 January 2021, to support businesses and jobs in the hospitality sector, the rate of VAT will be reduced to 5% (from the current 20%) and will apply to supplies of food and non-alcoholic drinks from restaurants, pubs, bars, cafés and similar premises across the UK.
The same will also apply to those businesses that supply accommodation and/or admission to attractions across the UK
Further guidance on the scope of this VAT cut is expected to be published by HMRC in the coming days.
Full detail of the government’s “Plan for Jobs 2020” can be found here. We will keep you updated as and when more detail on the workings and how to claim are published.
Mike Patterson is Head of Employment at Berwins. He is a regular speaker at HR and Employment events and is consistently recommended for his expertise in legal guides Legal500 and Chambers and Partners.
If you have any questions on the how the measures affect you or need support on the impact of COVID 19 on your business – including issues around furloughing, changing terms and conditions and redundancies – contact Mike directly via firstname.lastname@example.org.