What a few months we’ve all had! These are trying times and I hope you’re all keeping well and safe.
As you may have seen this morning, the government has today (July 8) revealed its plans to help the country’s economy recover in its summer economic statement. The Chancellor of the Exchequer, Rishi Sunak, announced today, during his summer statement that employers will receive a £1,000 “job retention bonus” for every worker they bring back from furlough who work until January 2021.
Employees must be continuously employed until at least January next year to be eligible for this bonus and to get the bonus and they must be paid at least £520 on average, in each month from November to January. He said employees returning to work under the scheme “need to be doing decent work”. They will have to earn on average at least £520 per month between the end of the job retention scheme and the end of January 2021.
Whilst today’s ‘mini-budget’ put a huge emphasis on the need to stabilise the job market, the job retention bonus will reward employers, encouraging them to maintain staffing levels despite the inevitable reduction in business caused by the pandemic. However, it’s also fair to say a £1,000 payment is a drop in the ocean when considering the cost of salaries, pension contributions and employers NI for each employee, so it is unlikely to prevent some job losses, unfortunately.
It is also clear from the statement this morning, the job retention scheme will end as planned in October. In light of this, if you are thinking about making changes to your staffing structure either through redundancies or losing hours etc, it would be best to start planning for this now and if you need any advice on how best to achieve your plans, I’m happy to chat this through with you.
As a reminder, please refer to our last update for a list of key dates for your diary to help you plan the changes being made to the CJRS. https://affinityhrm.co.uk/wp-content/uploads/2020/06/Flexible-Furlough-Scheme-Updated-Guidance-14.6.20.pdf.pdf
The chancellor also outlined a number of other measures including:
- Stamp duty holiday – This would exempt the first £500,000 of all property sales from tax.
- Vouchers of up to £5,000 for energy-saving home improvements as part of a wider £3bn plan to cut emissions
- A pledge to provide 30,000 new traineeships for young people in England, giving firms £1,000 for each new work experience place they offer
- A £1.6bn package of loans and grants for the arts and heritage sector
- The doubling of front line staff at job centres, as well as an extra £32m for recruiting extra careers advisers & £17m for work academies
- Employers will not have to pay any tax on coronavirus swab tests provided for their staff
- Kickstart Scheme’ where employers will be paid to create jobs for 16 to 24-year-olds at direct risk of long term unemployment, with an initial £2bn of funding committed.
- In regards to apprenticeships, the Government will pay £2,000 to companies for every apprentice they take on and £1,500 for every apprentice over 25.
- Temporary cut to VAT on food, accommodation and attractions from 20% to 5% is announced.
- “Eat out to help out” vouchers that will give diners 50% off their meals out, with conditions, for August up to £10 per head.
- Funding for the National Careers Service will be increased by £32m over the next two years while the number of work coaches will be doubled to help unemployed people find jobs.
As ever, if you have any questions, please get in touch and in the meantime, we’ll continue to stay in touch with you to provide you with further updates.
Look forward to catching up with you soon!