Below I have summarised all the main tax related updates we have seen this week.
• Green Homes Grant Scheme
• Summer Economic Update - Chancellor announces new support measures
• Countryside Stewardship Mid-Tier Applications – Exception Requests
• Avoid Pension Scams
If you have any queries regarding this weeks content please do not hesitate to contact me.
I hope you have a great weekend!
Steven Hillman ACA
Tel: 01934 444100
Green Homes Grant Scheme
The government is introducing a new Green Homes Grant which will provide at least £2 for every £1 homeowners and landlords spend to make their homes more energy efficient, up to £5,000 per household.
For those on the lowest incomes, the scheme will fully fund energy efficiency measures of up to £10,000 per household.
The grant is expected to launch in September 2020, and will cover a range of energy saving measures, including roof insulation, wall insulation and double glazing.
This is another measure expected to generate 100,000 additional jobs and will also be vital for meeting the target of net zero greenhouse gas emissions by 2050. The scheme aims to upgrade over 600,000 homes across England, saving households hundreds of pounds per year on their energy bills.
Summer Economic Update
On Wednesday 8th July 2020, the Chancellor Rishi Sunak made a speech entitled “Summer Economic Update” where he unveiled further Government supports and he unveiled the Government’s plan for jobs which he described as the “Second phase in in the Government’s economic response to the crisis.”
Here are the highlights and we will update you on the details in the next few days as the Government publishes the specifics of the supports.
The “Plan for Jobs” PDF can be seen:
CORONAVIRUS JOB RETENTION SCHEME (CJRS) AND JOB RETENTION BONUS
The CJRS ends in October and the Chancellor looked to cushion expected redundancies with the announcement of a Job Retention Bonus (JRB). The new scheme will give employers £1,000 for each previously furloughed employee they retain and keep in employment until January 2021, as long as they are paid at least £520 a month. Further details of the scheme are expected later in July.
KICKSTART SCHEME AND MEASURES TO HELP PEOPLE FIND WORK
In order to support people finding jobs, the Chancellor announced the Kickstart Scheme, which will provide £2 billion to support the creation of “high quality” six-month work placements for 16 to 24-year-olds on Universal Credit and at risk of long-term unemployment.
The Government will provide employers that offer the placements funding equivalent to 100 per cent of the relevant level of the National Minimum Wage (NMW) for 25 hours a week. It will also cover the associated Employer NICs and minimum automatic enrolment pension contributions.
Rishi Sunak also outlined additional measures, including funding for traineeships and employers that hire new apprentices, as well as funding for several careers and job-finding programmes.
The apprenticeships funding will provide £2,000 to employers in England for every apprentice hired under the age of 25 and £1,500 for each newly hired apprentice aged 25 or older. This funding is in addition to schemes already in place to support employers in taking on apprentices.
VALUE ADDED TAX REDUCED RATE FOR HOSPITALITY AND TOURISM SECTORS
The Chancellor outlined a VAT rate cut for the Hospitality and Tourism sectors from 20 per cent to five per cent. The measures relate specifically to food and non-alcoholic drinks and to accommodation and admission to attractions, with further details expected to be published later.
The VAT rate change comes into effect on Wednesday 15 July 2020 and will be in place temporarily until 12 January 2021.
EAT OUT TO HELP OUT
The “Eat Out to Help Out” scheme will provide a discount of 50 per cent of up to £10 a person on eat-in meals, including non-alcoholic drinks, at participating establishments on Mondays, Tuesdays and Wednesdays for the month of August.
Restaurants, cafes and pubs can sign-up for the scheme on a new website on Monday 13 July 2020.
STAMP DUTY LAND TAX HOLIDAY AND JOB CREATION MEASURES
There is a temporary cut in Stamp Duty Land Tax (SDLT) from 8 July by raising the nil-rate band from £125,000 to £500,000 until 31 March 2021. The Treasury estimates that, as a consequence, around nine in 10 people buying a main residence will pay no SDLT.
Further details can be found on SDLT changes here: https://www.gov.uk/guidance/stamp-duty-land-tax-temporary-reduced-rates
RESIDENTIAL RATES ON PURCHASES FROM 8 JULY 2020 TO 31 MARCH 2021
If you purchase a residential property between 8 July 2020 to 31 March 2021, you only start to pay SDLT on the amount that you pay for the property above £500,000. These rates apply whether you are buying your first home or have owned property before.
You can use the table to work out the SDLT due:
• Property or lease premium or transfer value SDLT rate
• Up to £500,000 Zero
• The next £425,000 (the portion from £500,001 to £925,000) 5%
• The next £575,000 (the portion from £925,001 to £1.5 million) 10%
• The remaining amount (the portion above £1.5 million) 12%
From 8 July 2020 to 31 March 2021 the special rules for first time buyers are replaced by the reduced rates for additional properties
Higher rates for additional properties
The 3% higher rate for purchases of additional dwellings applies on top of revised standard rates above for the period 8 July 2020 to 31 March 2021.
The following rates apply:
• Property or lease premium or transfer value SDLT rate
• Up to £500,000 3%
• The next £425,000 (the portion from £500,001 to £925,000) 8%
• The next £575,000 (the portion from £925,001 to £1.5 million) 13%
• The remaining amount (the portion above £1.5 million) 15%
New leasehold sales and transfers
The nil rate band which applies to the ‘net present value’ of any rents payable for residential property is also increased to £500,000 from 8 July 2020 until 31 March 2021.
The following rates will apply:
• Net Present Value of any Rent SDLT rate
• Up to £500,000 Zero
• Over £500,000 1%
Companies as well as individuals buying residential property worth less than £500,000 will also benefit from these changes, as will companies that buy residential property of any value where they meet the relief conditions from the corporate 15% SDLT charge.
On the 1 April 2021, the reduced rates shown in the above tables will revert to the rates of SDLT that were in place prior to 8 July 2020.
As outlined above we will keep you up to date with these and other measures as the Government releases further details. Please talk to us if you need any help during this time.
Countryside Stewardship Mid-Tier Applications – Exception Requests
The deadline to receive CS Mid-Tier applications is midnight on 31st July 2020. If you have not yet submitted your form, annexes, and any supporting documents, you need to submit these by the deadline if you are able to do so.
Email is the often the safest and quickest way to submit your application.
If you believe you will not be able to meet the 31st July deadline due to coronavirus (COVID-19), you must email RPA by 31st July to advise of this. Email: firstname.lastname@example.org, and use ‘CS 2020 Mid-Tier application exception’ as the subject title. If you are unable to email, you can call the helpline on 03000 200 301.
Once you have received an automatic receipt to your email, you must submit your application, annexes and supporting documents as soon as possible. RPA will not accept any applications, including annexes and supporting documents, after midnight on 31st August.
For Wildlife Offers, there is no exception and your application must be received before midnight on 31st July.
For more information see: https://www.gov.uk/guidance/coronavirus-covid-19-information-for-farmers-landowners-and-rural-businesses?utm_source=33102a37-9d17-4eeb-9bc2-00c23481af32&utm_medium=email&utm_campaign=govuk-notifications&utm_content=immediate
Avoid Pension Scams
In these tough times savers might increasingly look to transfer their pension, prompted by the instability of their employer or the financial markets.
Savers could be increasingly targeted by scammers attempting to lure them to 'safe havens'.
Fraudsters promise high returns and low risk, but in reality, pension savers that are scammed can be left with nothing.
When savers realise they have been scammed, it can be devastating – many lose their life savings. Once the money is gone, it is almost impossible to get it back.
How pension scams work
Anyone can be the victim of a pension scam, no matter how savvy they think they are. It is important that everyone can spot the warning signs.
Scammers try to persuade pension savers to transfer their entire pension savings, or to release funds from it, by making attractive sounding promises they have no intention of keeping.
The pension money is often invested in unusual, high risk investments like:
• overseas property and hotels
• renewable energy bonds
• storage units
Or it can be simply stolen outright.
Warning signs of a pension scam
Scammers often cold call people via phone, email or text – this is illegal, and a likely sign of a scam. They often advertise online and can have websites that look official or government backed.
Other common signs of pension scams:
• phrases like ‘free pension review’, ‘pension liberation’, 'loan’, ‘loophole’, ‘savings advance’, ‘one-off investment’, ‘cashback’
• higher returns – guarantees they can get better returns on pension savings
• help to release cash from a pension before the age of 55, with no mention of the HMRC tax bill that can arise
• high pressure sales tactics – time limited offers to get the best deal; using couriers to send documents, who wait until they are signed
• unusual high-risk investments, which tend to be overseas, unregulated, with no consumer protections
• complicated investment structures
• long-term pension investments – which often mean people who transfer in do does not realise something is wrong for a number of years
See the FCA and Pensions Regulator ScamSmart guidance on “Four simple steps to protect yourself from pension scams“ here: https://www.thepensionsregulator.gov.uk/-/media/thepensionsregulator/files/import/pdf/16423_pensions_consumer_leaflet_screen.ashx