Hello

It seems that HMRC's chief executive Jim Harra has beaten me to it in his criticism of some of the Chancellor's new Summer Economic Update giveaways. We are in a time of extremes. On one hand there are people who have suffered virtually no negative financial effects due to lockdown, while on the other, there are people whose livelihoods have suffered so badly that they may not recover for many years. The burning question is how to target government aid and stimulute our shrunken economy.

The new 'Eat Out to Help Out' (EOHO) scheme, in particular, is causing a number of concerns. Under this scheme restaurants can offer a 50% discount of up to £10 per head and then claim this back from the government. It is unclear as yet how this will interact with the new temporary reduced rate of VAT. If restaurants do not reduce prices to take into account the 5% VAT rate then they are in for a double subsidy. Additionally, will EOHO really persuade those people who feel eating out is unsafe to go to restaurants? And when you take into account that nearly 30% of our population is obese (and I am guessing that this statistic will have worsened during the lockdown), can we really eat our way out of this crisis? Is it good for anyone?

There are also concerns over the new Job Retention Bonus. Will this not simply be claimed by many employers who were already going to re-employ the workers that they had previously furloughed?

Finally, regarding the Stamp Duty Land Tax (SDLT) reductions, I simply don't believe that this will kick start a flagging housing market. We need more low cost homes.

I appreciate the Chancellor is attempting to save jobs and boost our severely depleted economy, but I wonder if these measures are the answer. I feel more confident about the new grant funding offered via Innovate.

Other news is that HMRC has confirmed that there is no taxable benefit when you offer employees virus testing. 

If you have any tax-specific queries, please post them up to our sister site, details are here: www.VtaxP.co.uk

Back soon 

Nichola Ross Martin FCA CTA (Fellow)
Tax Director

www.rossmartin.co.uk

Your Virtual Tax Partner® online PRACTICAL support for accountants, tax advisers BY accountants and tax advisers.

Quick News

Summer Economic Update: Live speech highlights
At a glance: all the chancellor's new measures designed to assist in reviving jobs and the economy following the outbreak of the Coronavirus. 

Summer Economic Update: SDLT reduction
A temporary reduction to Stamp Duty Land Tax (SDLT) on residential property in England and Northern Ireland.

Summer Economic Update: VAT reduction
A temporary cut to the rate of VAT on food, accommodation and entry fees to attractions from 20% to 5% for the next six months

Plan for Jobs: Job Retention Bonus
A Job Retention Bonus scheme aimed to ensure employers bring back furloughed staff and keep them in employment for the next six months.

A Plan for Jobs: Helping the unemployed
New schemes to help young unemployed people, create more apprenticeships and support those who lose their jobs to get back into the labour market quickly. 

A Plan for Jobs: Green measures
unding for new green initiatives aimed at creating jobs, helping those on low incomes and assisting the UK to meet its target of net-zero greenhouse gas emissions by 2050.

Eat Out to Help Out
A new scheme for restaurants to offer a discount to diners and encourage them to eat at restaurants.

Other News

UK launches Sustainable Innovation Fund
The UK government has launched a £200m Sustainable Innovation Fund in an effort to support new projects focusing on sustainable economic recovery from COVID-19. Round one funding is already open. 

Review of the Women in Finance Charter
HM Treasury has published the result of its 2019 review of the Women in Finance Charter. It analyses data received from 187 firms and reviews their progress against their Charter commitments.

Audit: October deadline for Big Four's plans for separation
The Financial Reporting Council (FRC) has published ‘Objectives, outcomes and regulation’, outlining its plans to separate the UK’s Big Four accounting firms' audit operations by 2024. 

COVID-19: Tracker
UPDATE: Start here to track the latest government measures and announcements aimed at supporting businesses and individuals during the pandemic. This week's key action areas are still: Employee Job Retention Scheme and Self Employed Income Support Scheme. New update on benefits in kind and virus testing.

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Start here to start up. Esssential reading for anyone thinking about starting up a new company.

R & D Zone: Take a tour
R&D Zone aims to provides you with practical know-how and support in putting together an R&D claim

Tax Guides and Updates (subscribers)

Sole trader v. limited company: Tax differences & savings 2020/21
This guide considers whether, from a purely tax point of view, it is more efficient to run your business as a sole trader or as a company.

Directors' Tax Planning toolkit 2020/21
This planner looks at a range of director tax issues, including company profit extraction. This year's toolkit, like all our maintained guides, is a rolling planner and is updated throughout the year.

Virtual Tax Partner Toolkits (freeview)

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Missed last time's Web-update?

Nichola's SME Tax W-update 2 July 2020

  • COVID-19: Tracker
  • Seven unmissable deadlines for this July
  • Last chance to settle Disguised Remuneration Schemes?
  • Corporate Insolvency and Governance Bill 2020...More

Nichola's SME Summaries for June 2020
Links to all of June's newswires...More

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Comments (2)

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I wish Nichola would stick to tax advice rather than using her otherwise excellent site to express her political views. It's never a good move.

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Thank you for your feedback. I am not intending my comments to political in any way, I quite like this chancellor and I am fully supportive of all the emergency measures particularly the JRS, SEISS and local authority grants, it's been very...

Thank you for your feedback. I am not intending my comments to political in any way, I quite like this chancellor and I am fully supportive of all the emergency measures particularly the JRS, SEISS and local authority grants, it's been very difficult for any government and they did well to steer us clear of a national panic when this thing reached the UK. I do notice what other countries are doing though and to that end I find it actually quite ironic that we are encouraging people to eat more when probably most people need to eat less and a lot of people won't benefit at all and have to resort to food banks.

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