Four new schemes to boost jobs
On 8 July, Chancellor Rishi Sunak announced a number of measures in his summer economic update. As part of the second phase of its response to the COVID-19 crisis, the Government has launched a targeted 'Plan for Jobs' with a Job Retention Bonus and Kickstart Work Placements, as well as support for traineeships and apprenticeships. Our Director of Tax, NEIL MOON, explains more.
In a policy paper published alongside Rishi Sunak's recent economic update, the Government announced what they described as a Plan for Jobs in the wake of the coronavirus pandemic.
'The recovery will take time and require all the dynamism and creativity that exists across all sectors and in all regions and nations of the UK,' the paper reads. 'The Government's initial response is helping families and businesses through the pandemic, protecting jobs and livelihoods. The Plan for Jobs is the next step towards economic recovery and securing the UK's long-term prosperity.'
With this in mind, the Chancellor outlined information about four specific schemes:
Job Retention Bonus (Coronavirus Job Retention Scheme (CJRS))
The Coronavirus Job Retention Scheme provides grant funding for employers to fund the payment of employee wages, employer's national insurance contributions and auto-enrolment pension contributions. This scheme commenced on 1 March 2020 and will close on 31 October 2020. It forms part of phase one of the Government's plan to support businesses during the pandemic.
According to the policy paper, the CJRS has so far supported over one million employers to protect over nine million jobs.
Under phase two, which is aimed at supporting the continuing employment of staff as employers bring them back from furlough, 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.
To qualify for the payment, the furloughed staff member must earn above the Lower Earnings Limit (£520 per month) on average between the end of the CJRS (October 2020) and the end of January 2021. Payments will be made from February 2021.
Further detail about the scheme will be announced by the end of July and we will provide guidance and assist our clients with making these claims when the scheme opens in due course.
Kickstart Scheme Work Placements
The Government will introduce a new 'Kickstart Scheme' in Great Britain, a £2 billion fund to create hundreds of thousands of high-quality work placements, each lasting six months and aimed at those aged 16-24 who are on Universal Credit. Funding available for each job will cover 100% of the relevant National Minimum Wage for 25 hours a week, plus the associated employer National Insurance contributions and employer minimum auto-enrolment pension contributions.
Traineeships
The Government will provide additional funding in England to fund high quality work placements and training for 16-24 year-olds. The Government will fund employers who provide trainees with work experience, at a rate of £1,000 per trainee. The scheme will open for applications in August and will run until December 2021. Funding is capped at 10 trainees per business.
Apprenticeships
The Government will introduce a new payment of £2,000 to employers in England for each new apprentice they hire aged under 25, and a £1,500 payment for each new apprentice they hire aged 25 and over, from 1 August 2020 to 31 January 2021. These payments will be in addition to the existing £1,000 payment the Government already provides for new 16-18 year-old apprentices.
If you need any more information on the topics discussed in this article, or would like to know how we can help your business, simply call us on 0115 955 5500 or email enquiries@pagekirk.co.uk.