- Extended tax cut for Personal Protective Equipment (PPE) & national supplies
- Extension of ‘credit holidays’
- The main announcements by the Chancellor in his statement on 8th July 2020 are:
- How to check if your business qualifies and how to apply for these schemes
Extended tax cut for Personal Protective Equipment (PPE) & national supplies
The Government has announced the temporary scrapping of VAT on PPE for use in infection
control has been extended until 31st October – saving care homes and businesses dealing with the
Coronavirus outbreak about £155 million. Import duty on PPE continues to be zero rated.
The decision, which will make it easier and less expensive for care homes, domiciliary service
providers, charities and businesses to acquire the vital kit comes after a temporary zero-rate of
VAT was applied to PPE sales for an initial three months from 1st May 2020 to 31st July 2020.
EU law governing VAT – to which the UK is bound until the end of the transitional period on 31st
December 2020 – requires the UK to charge VAT on the equipment; however the Government has
acted under an ‘exceptional basis’ allowed by EU rules during health emergencies. The move will
particularly benefit care providers, who are often unable to reclaim the 20% VAT they incur on
Funding has been provided to the Department of Health & Social care (DHSC) to support the
centralised procurement and supply of PPE, including supply to the NHS and private care
providers. It has already acted to speed up PPE supply and created a new national distribution
Here’s the link to the Government’s PPE supply portal:
Extension of ‘credit holidays’
The Financial Conduct Authority (FCA) has announced that it has issued instructions to credit
providers to extend the ‘credit holidays’ to customers who are still experiencing repayment
problems due to Covid-19.
The measures outline the options that lenders will provide to credit card and other revolving credit
(store card and catalogue credit) and personal loan customers who are coming to the end of a
payment freeze and for customers who have agreed an arranged interest-free overdraft of up to
£500. Customers yet to request a payment freeze or an arranged interest-free overdraft of up to
£500 will have until 31st October 2020 to apply for one.
The details of the updated FCA measures, which came in to force on 3rd July, are:
- If customers can afford to return to regular repayment, or make partial payments, it is in their best interest to do so.
- Lending firms should contact customers coming to the end of a first payment freeze to find out if they can resume payments – and if so, agree a plan on how the missed payments could be repaid.
- For customers still facing temporary payment difficulties as a result of Coronavirus, lending firms will provide them with support, which could include freezing or reducing payments on their credit card and personal loans to a level they can afford for 3 months.
- Customers who are negatively impacted by Coronavirus and who already have an arranged overdraft on their main personal current account can request up to £500 interest-free for a further 3 months. Firms will also provide these customers with further support where it is needed including reducing the cost of borrowing above the interest-free buffer, especially if this cost of borrowing would otherwise increase.
- Customers that have not yet had a payment freeze or an arranged interest-free overdraft of up to £500, and who experience temporary financial difficulty due to Coronavirus, would be able to request one up until 31st October 2020.
- Any payment freezes or partial payment freezes offered under this guidance should not have a negative impact on credit files; however, consumers should remember that credit files aren’t the only source of information which lenders can use to assess creditworthiness.
Economic update from the Chancellor of the Exchequer
The main announcements by the Chancellor in his statement on 8th July 2020 are:
Help for the Hospitality Sector:
- In August, everyone in the country (both adults and children) will be given an “eat out to help out” discount – 50% off at participating restaurants, cafes and pubs. It applies for a maximum discount of £10 per head (excluding alcohol) and can be used from Mondays to Wednesdays, with no limit on the number of visits. Individuals will not be issued with physical vouchers. The hospitality provider will do all the administration
- Hospitality businesses can claim the money back, with funds transferred to their bank account within five working days. The scheme, described as the first of its kind, is designed to help an industry employing 1.8 million people
- VAT on food, accommodation and attractions will be cut for the next six months from 20% to 5% – a “£4bn catalyst” for the sector designed to protect 2.4 million jobs
- The cut – which applies from next Wednesday 15th July and runs until Tuesday 12th January 2021 – covers food from restaurants, cafes and pubs (both eat in and take away), accommodation in hotels, B&Bs and caravan sites, and attractions such as cinemas, theme parks and zoos
Help for the Property Sector
- The threshold for paying stamp duty will be raised temporarily from £125,000 to £500,000 until 31st March 2021, resulting in the average stamp duty bill falling by £4,500
- The measure, designed to boost confidence in the housing market after a slump in transactions, is expected to mean nearly nine out of ten people buying a main home this year paying no duty at all
Help for Jobs & Employment
A jobs retention bonus will reward employers who bring back workers from furlough with a single grant of £1,000 per employee, provided that each employee is in work for at least 25 hours per week and completes at least two months of continuous employment between now and 31st December 2020. The £1000 payments to employers are expected to be paid in January 2021. All nine million of those currently on furlough will qualify
- As previously announced, the Government’s furlough scheme will wind down with monthly decreases in percentage support and will end completely on 31st October 2020
- £1.2bn has been pledged to the Department for Work and Pensions “to support millions of people back to work” through a substantial ramping up of Jobcentre support and activities
- Firms will be paid £1,000 to take on trainees, with £100m pledged to fund places in highdemand sectors such as engineering, construction and social care
- £2bn made available for “Kickstart” scheme for young people – with no cap on the number of places available
- The new ‘Kickstart’ scheme will pay employers to create new jobs for hundreds of thousands of 16-24 year olds at risk of long-term unemployment. Each new job must be for a minimum of 25 hours per week, paid at least the national minimum wage rate
Help to support Green Measures in the Housing/Buildings Sector
- Green measures totalling £3bn aim to make 650,000 homes more energy efficient, save households £300 a year on bills and support 140,000 jobs, many of which jobs will be new and will create opportunities for new and existing small SME’s
- £1bn of funding to improve the energy efficiency of public sector buildings
- A £2bn green homes grant will deliver vouchers to homeowners and landlords to make their homes more energy efficient. The current voucher proposal is for £5000 per home but this figure may be increased in areas of high social deprivation
How to check if your business qualifies and how to apply for these schemes
Because these proposals need to complete their legal passage through Parliament (they are known technically as ‘Statutory Instruments’) it is likely that qualification criteria and online application portals will be available by next Wednesday 15th July. We will advise you of these once they have been set up.
Access to the details of the Chancellor’s measures
If you would like to read the full text of the Chancellor’s measures you can do so by following this link
We will issue further advice and guidance Bulletins as the Covid-19 situation develops.
Sir Henry Boyle
1800 hrs 8th July 2020