Reduced rate of VAT for hospitality, holiday accommodation, and attractions.
The government will temporarily apply a reduced rate of VAT (5%) to certain supplies in the tourism and hospitality sectors. It will come into effect on 15 July 2020 and end on 12 January 2021.
The reduced rate will cover the following supplies:
- Hospitality: hot and cold food and hot and cold non-alcoholic beverages sold for on-premises consumption – for example, in restaurants, cafés and pubs – and hot takeaway food and hot non-alcoholic beverages sold for consumption off the premises. It does not include alcoholic beverages of any kind
- Accommodation: sleeping accommodation provided in a hotel or similar establishment, holiday home accommodation, pitch fees for caravans and tents and supplies of associated facilities
- Attractions: admission to shows, theatres, circuses, fairs, amusement parks, concerts, museums, zoos, cinemas, exhibitions and similar cultural events and facilities provided that these are not included within the existing cultural exemption
Eat Out to Help Out Scheme
You can use the Eat Out to Help Out Scheme to offer a discount to diners and encourage them to eat at your restaurant.
You can use the Eat Out to Help Out Scheme:
- all day, every Monday, Tuesday and Wednesday from 3 to 31 August 2020
- to offer a 50% discount, up to a maximum of £10 per person, to diners for food or non-alcoholic drinks to eat or drink in
- to claim the money back from the government
There is no limit to the number of times customers can use the offer during the period of the scheme. Your customers cannot get a discount for someone who is not eating or drinking.
Registration will close on 31 August.
You can register if your establishment:
- sells food for immediate consumption on the premises
- provides its own dining area or shares a dining area with another establishment for eat-in meals
- was registered as a food business with the relevant local authority on or before 7 July
You cannot register:
- an establishment that only offers takeaway food or drink
- catering services for private functions
- a hotel that provides room service only
- dining services (such as packaged dinner cruises)
- mobile food vans or trailers
To register you will need a government gateway user ID and password.
Changes to the Coronavirus Job Retention Scheme (CJRS).
The Coronavirus Job Retention Scheme will close on 31 October 2020.
From 1 July, employers can bring furloughed employees back to work for any amount of time and any shift pattern, while still being able to claim CJRS grant for the hours not worked.
From 1 August 2020, the level of grant will be reduced each month. To be eligible for the grant employers must pay furloughed employees 80% of their wages, up to a cap of £2,500 per month for the time they are being furloughed.
The timetable for changes to the scheme is set out below. Wage caps are proportional to the hours an employee is furloughed. For example, an employee is entitled to 60% of the £2,500 cap if they are placed on furlough for 60% of their usual hours:
- June and July, the government will pay 80% of wages up to a cap of £2,500 for the hours the employee is on furlough, as well as employer National Insurance Contributions (ER NICS) and pension contributions for the hours the employee is on furlough. Employers will have to pay employees for the hours they work.
- August, the government will pay 80% of wages up to a cap of £2,500 for the hours an employee is on furlough and employers will pay ER NICs and pension contributions for the hours the employee is on furlough.
- September, the government will pay 70% of wages up to a cap of £2,187.50 for the hours the employee is on furlough. Employers will pay ER NICs and pension contributions and top up employees’ wages to ensure they receive 80% of their wages up to a cap of £2,500, for the time they are furloughed.
- October, the government will pay 60% of wages up to a cap of £1,875 for the hours the employee is on furlough. Employers will pay ER NICs and pension contributions and top up employees’ wages to ensure they receive 80% of their wages up to a cap of £2,500, for the time they are furloughed.
Employers will continue to be able to choose to top up employee wages above the 80% total and £2,500 cap for hours not worked at their own expense if they wish. Employers will have to pay their employees for the hours worked.
The government will make a one-off payment of £1,000 to UK employers for every furloughed employee who remains continuously employed through to the end of January 2021. Employees must earn above the Lower Earnings Limit (£520 per month) for the months of November, December and January. Payments will be made from February 2021.
Self Employed Income Support Scheme (SEISS)
The scheme has been extended to a second and final payment. If you were eligible for the first grant and can confirm to HMRC that your business has been adversely affected on or after 14 July 2020, you’ll be able to make a claim for a second and final grant from 17 August 2020.
The scheme allows you to claim a taxable grant worth 70% of your average monthly trading profits, paid out in a single payment covering three months’ worth of profits, and capped at £6,570 in total.
As with the first grant, HMRC will contact you if you’re eligible.
You can make a claim for the second grant if you’re eligible, even if you did not make a claim for the first grant.
All of the following must also apply:
- you traded in the tax year 2018 to 2019 and submitted your Self Assessment tax return on or before 23 April 2020 for that year
- you traded in the tax year 2019 to 2020
- you intend to continue to trade in the tax year 2020 to 2021
- you carry on a trade which has been adversely affected by the coronavirus
You cannot claim the grant if you trade through a limited company or a trust.
Tax Credits Renewal 2020
The deadline for people to renew their tax credits is 31 July. Any changes in circumstances or income must be notified to HMRC by that date.
While most tax credit awards will be renewed automatically in 2020, self-employed people, those in receipt of taxable social security benefit, or those who have other income will need to review their total household income and tell HMRC if the income information held is incorrect.
Automatic renewal will mean that HMRC states the claimant’s circumstances on a renewal notice and the claimant needs to contact HMRC only if the income shown or circumstances detailed are wrong. Otherwise, HMRC will finalise entitlement for 2019-20 and put in place a claim for 2020-21 on 31 July.
This does still mean that the claimant will need to know their income figures for the 2019-20 tax year in order to assess whether the information held by HMRC is correct.
Class 2 NIC
It has been reported by HMRC that many self-employed individuals are wrongly registered to complete self-assessment tax returns without being registered for class 2 National Insurance.
The current rate of contributions is £3.05 per week and only payable when profits are £6,475 or more in a tax year but can be paid voluntarily. These count towards contributions history required for certain state benefits such as the state pension.
We encourage everyone to monitor their National Insurance record through their personal tax account to ensure that their contributions are being accurately recorded by HMRC.
You can create a personal tax account here: https://www.gov.uk/personal-tax-account/sign-in/create-account