Rishi Sunak has announced a ‘Plan for Jobs’ to drive the UK economy towards recovery from the lockdown measures imposed earlier in the year. The Chancellor has released details of a number of schemes designed to promote economic activity and safeguard jobs.
Firstly, there is a financial incentive for employers to welcome furloughed employees back into their businesses. Amid concerns that staff could face redundancy as government furlough money is scaled back, the Chancellor has pledged a £1000 reward for each member brought back and kept in employment until 31st January 2021. This Job Retention Scheme will contribute to job security and support employers who have taken a financial hit.
Also unveiled is an incentive intended to encourage employers to retain their team members into the next year. The government’s Job Retention Bonus, announced during the Summer Economic Update, enables employers to apply for a bonus of £1000 per eligible worker. Providing the company has a UK bank account and has fulfilled their obligations concerning PAYE filing, paying and enrolment for all employees, this scheme is open to any employees who were furloughed using an eligible Coronavirus Job Retention Scheme claim; have been continuously employed since their furlough began; and have been paid, as a minimum, an average of £520 per month between November 2020 and January 2021. The staff member does not need to have been paid that amount every month, but has to have received some earnings in each of the calendar months, and at least £1,560 total across all three.
An alternative scheme has been developed to help young people who are currently out of work and struggling to find employment. The Kick-Start scheme comes at a cost of two billion pounds and will underwrite the creation of thousands of jobs for 16-24 year olds that are in receipt of Universal Credit; the government will put forward the equivalent of 25 hours a week at minimum wage, although the employers have the option of topping the wages up above that. The employer will be required to prove that it is a new job being created for the purpose of Kick-Start and they will need to equip their young employee with the necessary skills to go on and find further employment at the end of the six month placement.
A further 30,000 new traineeship positions have been promised to provide young people with opportunities to gain work experience. The Treasury will pay firms £1000 per work experience place they offer, as well as providing support in key subjects and working on employability skills. Positions will be available to 16-25 year olds and are mostly unpaid, although employers sometimes offer help with expenses.
To support the property market, green homes grants are being made available to allow homeowners to make improvements to the energy efficiency of their home. They can claim up to £5000 for renovations such as replacing single glazed windows and doors, improving insulation and upgrading heating systems. Homebuyers may be able to take advantage of the stamp duty holiday that has seen the lower threshold raised, meaning homes below the value of £500,000 are now exempt. It is projected that 9 out of 10 buyers will pay no stamp duty at all as long as they complete by the 31st March 2021. Both of these measures only currently cover England.
A VAT decrease has been enacted within the hospitality sector until the end of January 2021. The new rate of 5% is applicable on food, non-alcoholic drinks, accommodation and attractions. As another measure to support hospitality businesses, Sunak announced the ‘Eat Out to Help Out’ scheme that will see the treasury foot 50% of food/non-alcoholic drinks bills (up to £10 per person) for customers dining out every Monday-Wednesday throughout August.
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