Posted on: 15 July 2020
How is the government supporting the UK post-COVID-19?
On 8th July 2020, Chancellor of the Exchequer, Rishi Sunak, gave an economic update and announced measures to help restart the economy following the relaxation of the Coronavirus lockdown rules.
We have summarised some of the key points from the announcement relevant for businesses.
Key points from the Summer Economic Update
Rishi Sunak’s announcement on 8th July 2020 focused on the current, third phase of the Government’s plan for the UK, which was jobs. The next phase of the recovery plan is how the UK will be rebuilt once the pandemic is over.
Job retention scheme bonus
The furlough scheme has meant that many businesses have been able to keep members of staff on the books, on 80% pay whilst the business is closed, but Mr. Sunak recognised that the scheme can’t go on forever.
The furlough scheme will come to an end in October as previously outlined, but the government announced an additional Job Retention Bonus. If an employer brings back a furloughed employee and has them in employment until the end of January 2021, the business will receive £1,000 per employee. The employee must be paid at least £520 per month, which the government believes will ensure that employees being brought back are doing valuable work and being paid fairly.
Mr. Sunak added that if all 9 million employees that are currently on furlough returned to work, the government would be providing an additional £9.4bn support package for UK businesses.
The government recognised that young people coming out of education and into work have been disadvantaged by the Coronavirus pandemic, as this age group is two and half times more likely to be working in a sector that has lost jobs due to Coronavirus.
The Kickstart Scheme pays employers to create new jobs for 16-24 year-olds who are at risk of unemployment. Funding for a business is conditional on the basis that it is a new job created within the business, with wages being paid by the government for 6 months, as well as any associated overhead costs such as NI & pension costs. The job would be subsidised by the scheme for the first 25 hours per week, paying at least minimum wage, with employers topping up any additional hours and providing appropriate training in the role.
Applications for the scheme are opening soon, with the new starters beginning their role as soon as this autumn. The scheme is open to any UK businesses, with no limit on how many employees are taken on, and has an initial budget of £2bn.
Traineeship bonus and Apprenticeship payments
The traineeship scheme is designed to get young people ready for work, and has proven to be successful in the past. During the economic update, Mr. Sunak pledges £1,000 for any business who takes on a trainee aged between 16 and 24, capped at a maximum of 10 trainees per firm.
UK businesses will also be paid £2,000 for every new apprenticeship created for a young person within the next 6 months, but will also pay £1,500 for every apprenticeship created for a person aged 25 or above.
Hospitality and tourism sector protection
The hospitality and tourism sectors were identified as the hardest hit by Coronavirus, with the most jobs at risk, so to get the industries thriving again, Mr. Sunak announced two new measures to protect jobs.
VAT on food, drink (non-alcoholic), leisure attractions and accommodation will be cut between 15th July to 12th January 2021, from 20% to 5%. This aims to give businesses like pubs, cafes, restaurants, hotels, caravan parks, zoos and cinemas a £4bn boost.
The government also announced the “eat out to help out” scheme to reassure and encourage customers to dine out again at cafes, pubs and restaurants again. Under the scheme, meals eaten at a participating restaurant, excluding alcohol, will be discounted by 50% throughout August, which business owners would claim back from the government. This scheme will be valid from Mondays to Wednesdays with a maximum discount of £10 per head. Registration for the scheme will be open on a government website available from Monday 13th July.
COVID-19 business guidance
For further guidance on how you can keep yourself and your business healthy as COVID-19 continues to impact our lives, take a look at some of our articles by following these links:
- What is Phase Three of the UK Government’s COVID-19 plan?
- Commuting to work whilst COVID-19 is still a threat
- Reopening your salon based business after the coronavirus lockdown
- COVID-19: What if working 2 metres apart isn’t possible
- Creating a return to work action plan
- What support is available for businesses during the coronavirus (COVID-19) pandemic?
Business insurance with Premierline
It’s important to make sure that you have the right insurance in place to protect the business that you have built.
Every business is different and has its own business insurance needs, which is why we work with some of the UK’s most well-known insurers to make sure that you are getting the right insurance cover for your business.
To help you and your business during these unprecedented circumstances, Premierline has taken steps to ensure that we can continue to offer our award-winning service.
Compare business insurance
More from our Insight Hub
The information and tools contained in this guide are of a general informational nature and should not be relied upon as being suitable for any specific set of circumstances. We have used reasonable endeavours to ensure the accuracy and completeness of the contents but the information and tools do not constitute professional advice and must not be relied upon as such. To the extent permitted by law, we do not accept responsibility for any loss which may arise from reliance on the information or tools in our Insight Hub.