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Coronavirus (COVID-19): Business briefing – 8 July 2020

Chancellor announces measures to aid UK’s economic recovery from COVID-19 crisis
Chancellor of the Exchequer Rishi Sunak has unveiled a number of measures – including paying £1,000 to employers for each employee they bring back from furlough – to aid the UK’s economic recovery from the COVID-19 crisis.

Mr Sunak told the House of Commons he was “not just going to accept” rising unemployment and that although hardship lies ahead, “no one will be left without hope”.

The measures announced by the Chancellor today include:

  • A jobs retention bonus of £1,000, per employee, for businesses bringing back employees from furlough and continuously employing them from November until January
  • VAT cut from 20% to 5% for the hospitality and tourism sectors from 15 July to 12 January
  • People can get 50% off vouchers in August as part of the ‘Eating Out to Help Out’ scheme, aimed at getting people back in pubs, cafes and restaurants
  • The kickstart scheme – grant funding for employers to create new jobs for any 16 to 24-year-old at risk of long-term unemployment, with government paying their wages, plus overheads, for the first six months. The first kickstarters will be in their new jobs this autumn, and there will be no cap on the number of places available
  • For the next six months, businesses will be paid up to £2,000 per new apprentice they take on
  • Investing an additional £1 billion in the Department of Work and Pensions to support people back into work
  • From September, a £2 billion green homes grant for homeowners and landlords to carry out works to make homes more energy efficient
  • £1 billion to improve the energy efficiency of public sector buildings
  • £50 million fund to pilot the decarbonisation of social housing
  • Stamp duty threshold increasing to £500,000

Mr Sunak’s announcements today are the second phase of the UK’s economic response to the coronavirus crisis. The first phase, which included the Coronavirus Job Retention Scheme, supported more than 11 million people and supported more than a million businesses through grants and government-backed loans.

He added: “Despite the extraordinary support we’ve already provided, we face profound economic challenges. World economic activity has slowed with the IMF expecting the deepest global recession since records began, household consumption – the biggest component of our economy – has fallen steeply, businesses have stopped trading and stopped hiring.

“Taken together, in just two months, our economy contracted by 25%, the same amount it grew in the previous 18 years.

“I want every person in this house, and in the country to know that I will never accept unemployment as an unavoidable outcome.

“In truth, the job has only just begun. Our plan for jobs will not be the last action. It is merely the next in our fight to recover and rebuild after coronavirus.”

The Chancellor told the House of Commons it was “vital” those going back to work were not returning “just for the sake of it” and that each employee must be paid at least £520 on average in each month from November to January.

He added: “Our message to businesses is clear. If you stand by your workers, we will stand by you.”

On the kickstart scheme, the Chancellor urged businesses to hire as many kickstarters as possible, and said the green initiatives announced today would support around 140,000 green jobs.

The ‘Eating Out to Help Out’ scheme, will run from Monday-Wednesday each week in August, combined with the VAT cut, will protect the hospitality and tourism sectors, which have been hit hardest by the coronavirus crisis.

“Our economy relies on consumption, especially social consumption, the pubs, cafes, restaurants, hotels and B&Bs that bring life to our villages, towns and cities,” the Chancellor said.

“These sectors employ over 2 million people disproportionately younger women and people from black, Asian and minority ethnic communities, and many rural and coastal communities rely on these industries.

“80% of hospitality firms temporarily stopped trading, and 1.4 million workers have been furloughed, the highest proportions of any sector.”

The Chancellor said he knew people were cautious about going out, but businesses had been working hard to make their premises safe and they needed confidence from the public that demand would be there.

Concluding, he said: “For me, this has never just been a question of economics, but of values.

“We will not be defined by this crisis, but by our response to it.”

Maintaining records of staff, customers and visitors to support NHS Test and Trace
Businesses in certain sectors should collect details and maintain records of staff, customers and visitors on their premises to support NHS Test and Trace. There is a higher risk of transmitting COVID-19 in premises where customers and visitors spend a longer time in one place and potentially come into close contact with other people outside of their household. To manage this risk, establishments in the following sectors, whether indoor or outdoor venues or mobile settings, should collect details and maintain records of staff, customers and visitors:

  • hospitality, including pubs, bars, restaurants and cafés;
  • tourism and leisure, including hotels, museums, cinemas, zoos and theme parks;
  • close contact services, including hairdressers, barbershops and tailors;
  • facilities provided by local authorities, including town halls and civic centres for events, community centres, libraries and children’s centres;
  • places of worship, including use for events and other community activities.

More information and guidance on the information to collect; how records should be maintained; and when information should be shared with NHS Test and Trace, is available here.

Additional updates and guidance

Scheme end: Deferral of VAT payments due to coronavirus
The VAT payments deferral scheme ended on 30 June 2020 as previously set out. More information is available here.

HM Treasury extends tax cut to PPE costs
The temporary scrapping of VAT on PPE has been extended until the end of October. More here.

Self-Employment Income Support Scheme
Guidance on the Self-Employment Income Support Scheme has been updated here with new examples for how a business could be adversely affected by coronavirus and with information here on how different circumstances affect the scheme.

Mandatory MOT testing to be reintroduced from August 1
Mandatory MOT testing is to be reintroduced from August 1 2020. Due to the coronavirus outbreak, drivers were granted a six-month exemption from MOT testing in March. However, as restrictions are eased when safe to do so, all drivers whose car, motorcycle or van is due for an MOT test from August 1 will be required to get a test certificate to continue driving their vehicle. Find out more here.

Coronavirus job retention scheme: video with details on flexible furloughing
Watch a video on the coronavirus job retention scheme with information on flexible furloughing and watch other videos about the support available to help deal with the economic impact of coronavirus. Find out more here.

Advice for food businesses in response to the coronavirus outbreak
Updated guidance includes a new section on prevention of infection and a revised section on management of outbreaks including contact details for health protection teams. Find out more here.

Additional guidance for publicans destroying spoilt beer
Additional guidance has been added for publicans destroying spoilt beer. Find out more here.

Exporting PPE
Guidance has been updated as you no longer need to apply for an export licence to export personal protective equipment (PPE). Find out more here.

Corporate Insolvency and Governance Act 2020
The measures introduced by the Act will relieve the burden on businesses during the coronavirus outbreak and allow them to focus all their efforts on continuing to operate. Find out more here.