DWF comments on Jobs Retention Bonus
Commenting on the Jobs Retention Bonus announced by the Chancellor, Joanne Frew, National Head of Employment at DWF said:
"Employers are being encouraged to return furloughed employees to the workplace with a £1,000 bonus for every employee who is still employed in January 2021. Employees must be paid at least £520 per month. If every furloughed employee was brought back to work, this would amount to a £9 billion retention policy. The bonus is aimed at incentivising and rewarding employers who stand by their workforce, with the Chancellor confirming "if you stand by your workers, we will stand by you."
"With the Coronavirus Jobs Retention Scheme closing on 31 October 2020, many employers have been concerned about what support will be available from the Government. With a primary focus on protecting jobs, the Chancellor set out his plans to help re-open the economy with further measures such as the discount vouchers to eat out in August, reducing VAT in the hospitality and tourism sectors from 20% to 5% until 12 January 2020 and reducing stamp duty on transactions below £500,000 until 31 March 2021.
"At a time when employers are making significant decisions about the future of their workforce, the Jobs Retention Bonus might help steer some employers to avoid wide-scale redundancies while they wait to see what impact the stimulus plans have on the economy. Although a clear step in the right direction, some employers do not have the luxury of time and are having to make difficult decisions to survive."
DWF comments on Stamp Duty changes
Lee Pickett, real estate partner at global legal business DWF, comments on the Chancellor announcing cuts to Stamp Duty Land Tax. He said:
"The Stamp Duty Land Tax (SDLT) cut by the Chancellor is a nice boost for the housing market which is often considered the bedrock of the wider UK property market. Those not yet committed to a house purchase may be encouraged to follow through rather than withdraw (in many cases collapsing a chain of several transactions).
"In some cases where those who were minded to sit tight and consider whether to move within the housing ladder or convert from renting to home ownership, will now be encouraged to do it now because of the considerable savings available until March 2021.
"Where new build sales were incentivised by SDLT contributions, those costs which were effectively considered price reductions by mortgage lenders are now being met by the public purse which should give a boost to house builders and help stabilise or even improve values/ house prices."
DWF comments on green energy ambitions for homes and public buildings
Darren Walsh, energy partner at global legal business DWF, comments on the green energy ambitions for homes and public buildings announced by the Chancellor. He said:
"The Chancellor's focus on green jobs and a green economic recovery is welcome. The green home initiative seems to be a good place to start and the hope is that local businesses see a real benefit from the uptake of energy efficient home improvements.
"Domestic initiatives for improvements in energy efficiency will certainly play a part in seeking to reduce carbon emissions and utilising less efficient heating and heat conservation systems in many peoples' homes. We just hope that this initiative does not follow the same path as previous green initiatives such as the domestic feed in tariff, where that industry saw a boom and bust fate when the Government decided that the scheme was no longer affordable. Many local businesses that had set up to meet the domestic demand; soon faced challenges when the tariff was cancelled.
"The scheme to increase energy efficiency in public buildings is also welcomed. Previous initiatives have not delivered the desired results because many public authorities have faced challenges in seeking to apply retrofits to existing public buildings, which are often inefficient and difficult to modernise. Schemes around rooftop solar PV on all public buildings or use of district heating networks may assist to heat and power these buildings, which would have the added benefit of accelerating the decarbonisation of powering and heating many public buildings. With virtually all local authorities in the UK declaring a climate emergency, all will be developing their climate emergency action plans; so this added source of Government funding will be well-received in times when local authorities will be facing funding challenges following the COVID-19 relief measures they have been required to implement."
DWF comments on VAT cut for hospitality sector
Jon Stevens, tax partner at global legal business DWF, comments on the VAT reduction announced by the Chancellor for the hospitality sector. He said:
"The hospitality sector has long campaigned for a reduced rate of VAT and it is a shame that it has taken the economic damage of COVID-19 to produce a temporary tax cut. However, businesses in the restaurant and hospitality sectors will welcome the reduction in VAT to 5% that will hopefully encourage people to spend money with them while we recover from lockdown."
