I think this is going to be the last weekly ‘Thoughts’ - whether it’s because the legislative situation is settling down or just because it’s the silly season, there has been rather less to share with you each week over the last little while. It’s my intention that I will do this at least once a month for the rest of this year and that we will put extra ‘Thoughts’ in if any burning issues arise. I hope you have found it useful and to some extent entertaining over the last few, now nearly six, months. A little different from the three weeks we were asked to consider back in March!
I understand that getting a table at the beginning of this week for restaurants doing ‘Eat out to help out’ was remarkably difficult – suggesting that this was a very good initiative. Reports suggest that 64 million meals have been claimed since the start of August, costing £180m in the first two weeks. I wonder whether it will have changed habits? Only time will tell.
My tip for changes in the autumn budget, supported by an article in this week’s Taxation magazine, would be an increase of capital gains tax rates to marginal income tax rates. This is not based on any punter’s supposition, it’s based on the fact that the rates are a bit peculiar at the moment and apparently capital gains tax receipts soared for the last recorded tax year 2018/19 - and obviously an increase in rates would massively increase the Treasury take. So perhaps if you are thinking of selling something, you might want to do it before the budget which will be sometime in October - that’s if you think this tip has any validity.
From 1 September, employers using the Coronavirus Job Retention Scheme (CJRS or furlough) will have to make a contribution to the payment of furlough to employees. Whilst employees will continue to receive 80% of their average pay up to a cap of £2,500, the government will only contribute 70% of the pay up to a limit of £2,187.50. The remaining 10% or £312.50 will have to be found by employers. This is in addition to the employer’s NI and pension contributions that were withdrawn from the government’s support from 1 August.
The Office of National Statistics (ONS) reports that 12% of workers, or three million people, were still furloughed from late July to mid-August, although this is half the number from two months earlier. As the contribution to furlough from employers increases, we will have to see how this translates into job retention or redundancy.
On 21 August the Government announced that there was an extension on Covid-stay that tenants would not face eviction from properties for a further four weeks until 20 September, taking the total period to six months. There will also be greater protection from eviction over the winter with six months’ notice required in all up to 31 March 2021, except in the most serious of cases. Once court cases resume, the most serious cases will be prioritised, such as where the tenant hasn’t paid rent for over a year, anti-social behaviour, or domestic abuse. Independent research indicates that 87% of tenants have continued to pay full rent, with 8% agreeing reduced fees with landlords.
So that’s me signing off until late September.
Keep well all.