London Harrow and Mayfair-based accountancy firm Macalvins Chartered Accountants has welcomed the Chancellor’s latest measures to protect and create jobs as the Government attempts to kick start the economy.
Businesses have been severely affected by the Coronavirus pandemic with the UK economy shrinking more in a few months than it has grown in the last 18 years.
Macalvins Chartered Accountants said existing measures offered by the Government had already done a lot to support businesses, particularly the Coronavirus Job Retention Scheme, but it is clear that measures would have to end.
Tariq Husain, CEO at Macalvins Chartered Accountants, said: “Businesses have been anxious about the whittling down of support in the months to come. The Chancellor made it clear in his speech that the Government couldn’t continue to prop up jobs or businesses that were likely to fail without support.
“However, many will be pleasantly surprised with what Rishi Sunak has announced, which will go some way in helping businesses to rebuild and recover.”
Tariq said that chief among the Government’s new measures was the Job Retention Bonus. This new measure will offer a one-off payment of £1,000 for each previously furloughed employee that employers retain and keep in employment until January, as long as they are paid at least £520 a month.
This was one of several important measures announced as the Government outlined its plans to “protect, support and create jobs”.
Tariq said: “The bonus tied to other measures, such as the Kickstart Scheme, which offers to cover 100 per cent of the wage costs for 16-24-year-olds at risk of long-term unemployment that are enrolled on work placements for six months, are important in helping businesses to retain and find new workers.”
Another key measure announced, which left Tariq encouraged by the Government’s approach was a temporary VAT cut for accommodation, attractions, food and non-alcoholic drinks.
This will take effect from 15 July 2020 to 12 January 2021 and reduce VAT to just five per cent on these supplies to support businesses and jobs in the hospitality sector, which has been badly affected by Coronavirus.
The Chancellor also confirmed Eat Out to Help Out scheme, which will see every diner offered a 50 per cent (capped at £10 per head) on their meal at participating restaurants, cafés, pubs or other eligible food service establishments.
Valid Monday to Wednesday on any eat-in meal at participating businesses for the entire month of August, the costs will be fully reimbursed by the Government.
“The hospitality sector wasn’t the only industry to benefit from the Chancellor’s measures,” explained Tariq. “An immediate temporary increase to the Nil Rate Band of Residential Stamp Duty Land Tax, in England and Northern Ireland, from £125,000 to £500,000 will mean that nine out of 10 ten people getting on or moving up the property ladder won’t pay tax.”
Macalvins Chartered Accountants said that this and a Green Homes Grant to improve energy efficiency in homes would help to prop up the construction and property sectors at a time when they are struggling due to decreased demand.
However, considering the total cost of the Government’s ambitious plan is around £30 billion, Tariq wonders how it intends to recover the costs of these latest measures.
“The Chancellor alluded to a Budget and Spending Review in the autumn and the Government will need to take big steps to recoup the billions of pounds it has spent to support the economy” added Tariq. “Businesses and individuals will need to carefully monitor this later in the year as we are likely to see measures that may affect tax and public spending.”
If you would like to learn more about how Macalvins Chartered Accountants can support you with these measures, please visit www.macalvins.com.