Tourism policy updates from the Chancellor of the Exchequer, Rishi Sunak. Here are the Top 10 tourism policy updates you need to know.

Today the Chancellor of the Exchequer, Rishi Sunak, delivered a very positive financial statement in Parliament outlining a package of measures to support jobs across the UK and give businesses the confidence to retain and hire.

The Chancellor noted that tourism has been one of the worst affected sectors and recognised hospitality and tourism as vital parts of the UK’s economy and a pillar of social life around the UK.

Included in Mr Sunak’s announcement were the following measures:

VAT rate reduction: 

The announcement of a 6-month reduction in the rate of VAT from 20% or 5% on tourism and hospitality-related activities. The reduction will come into force from 15 July 2020 and remain until 12 January 2021.

Further guidance on the scope of this relief will be published by HMRC in the coming days.

However, Tourism Alliance has been in touch with HM Treasury officials since the announcement and they have clarified that the reduction in VAT will apply when the payment is received – not when the product is ‘consumed’.

This means that businesses can apply the reduced rate to any booking where the payment is received between 15 July 2020 and 12 January 2021 and provides significant opportunities for businesses to improve their cashflow by selling summer 2021 product at the low VAT rate.

In response to this, KPMG is hosting a leisure and hospitality webinar covering, what will the VAT rate cover, how to update accounting system and other areas of considerations. It is scheduled to take place at 12:30 – 1:30pm on Friday 10 July 2020. Please email Nicola Robson at KPMG here  to register.

Job Retention Bonus: 

UK Employers will receive a one-off bonus of £1,000 for each furloughed employee who is still employed as of 31 January 2021. This support will help businesses retain the 1.5 million workers in our sector that are still furloughed.

Employees must earn above the Lower Earnings Limit (£520 per month) on average between the end of the Coronavirus Job Retention Scheme 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.

Eat Out to Help Out: 

To encourage people to safely return to dining out, the Government’s new Eat Out to Help Out scheme will entitle every diner to a 50% discount of up to £10 per head on their meal, at any participating restaurant, café, pub or other eligible food service establishment across the UK from Monday to Wednesday every week throughout August 2020.

Businesses will need to register with the scheme on before being able to offer the discount, as well as be Food Standards Agency approved. The online portal opens on 13th July.

Instead of issuing discount vouchers – which the government felt increased the risk of fraud – restaurants, cafes and pubs will be able to claim back the cash.

Effectively, that means a family of four could save up to £40 on a meal out in a restaurant or cafe.

The refund will then been transferred into restaurants, cafes and pubs’ bank accounts within five working days.

Kickstart Scheme: 

A new £2 billion scheme will pay employers to create new fully subsidised jobs for those aged 16-24 and at risk of long-term unemployment, with those claiming Universal Credit also being eligible. Funding available for each six-month job placement will cover 100% of the National Minimum Wage for 25 hours a week – and employers will be able to top this wage up. Businesses will be given £2,000 for each new apprentice they hire under the age of 25. This is in addition to the existing £1,000 payment already provided for new 16-18-year-old apprentices and those aged under 25 with an Education, Health and Care Plan.

Employment and support schemes: 

A total of £1.6 billion will be invested in scaling up employment support schemes, training and apprenticeships to help people looking for a job. This means Government will provide £2,000 to employers for each new apprentice they hire ages under 25 between August and January 2021. To get the bonus, firms must pay at least £520 each month.

Travel Corridors Guidance Updated

DFT has updated the guidance for Travel Corridors  with more information on transit stops, passengers arriving in England before 10 July 2020 and British overseas territories

Public Health Officer Guidance

Public Health Officers (PHO) have been given powers to control the spread of coronavirus in the UK.

New guidelines have been published that explain their powers and outline how these powers should be used. These are useful to know, especially for accommodation businesses who may need to assistance if they have a customer that they suspect has Coronavirus. You can read the full guidance here.  We are seeking clarity for our accommodation partners how they can contact PHO in Lincolnshire.

Deferring Self-Assessment Payments

The guidance for self-employed people has been updated to explain why people’s June 2020 Self Assessment statements showed a date of 31 January 2021. Apparently, this is because HMRC updated their IT systems to prevent customers incurring late payment interest on any July 2020 Payment on Account paid between 1st August 2020 and 31 January 2021. The deferment has not been applied for all customers by HMRC and it remains optional. More information

Chancellor’s Summer Economic statement

Today the Chancellor of the Exchequer, Rishi Sunak, gave his summer economic statement in which he set out a ‘Plan for Jobs’  to continue the UK’s recovery from the Coronavirus outbreak. The Chancellor noted that tourism has been one of the worst affected sectors and below is a summary of the key points from the Chancellors statement for tourism businesses.

  • The rate of VAT applied on most tourism and hospitality-related activities will also be cut from 20% to 5%.
  • To encourage people to safely return to eating out at restaurants the Government has set up a new Eat Out to Help Out discount scheme. It will provide a 50% reduction for sit-down meals in cafes, restaurants and pubs across the UK from Monday to Wednesday every week throughout August 2020.
  • A bonus scheme worth up to £9 billion for firms has been announced to re-employ furloughed workers. An employer who brings someone back off furlough, and keeps them in a job until January, will get a £1,000 bonus. To get the bonus, firms must pay at least £520 each month.
  • A new £2 billion Kickstart Scheme will also be launched to create fully subsidised jobs. Businesses will be given £2,000 for each new apprentice they hire under the age of 25. This is in addition to the existing £1,000 payment already provided for new 16-18-year-old apprentices and those aged under 25 with an Education, Health and Care Plan.

Industry updates

The DFDS ferry  route from Newcastle to Amsterdam will re-open on 15 July.

In July and August Etihad  plans to return to resume a wider network to include 58 destinations (subject to the lifting of international restrictions).This will include major gateways in Europe including London.

Creating jobs: 

The plan will also create tens of thousands of jobs through bringing forward work on £8.8 billion of new infrastructure, decarbonisation and maintenance projects. In addition, £5.8 billion will be spent on shovel-ready construction projects to get Britain building.

Greater Lincolnshire to Get £25.8m in ‘New Deal’

The Greater Lincolnshire LEP has received a £25.8 million cash boost from the Government to fund ‘shovel-ready’ projects to help the local economy and create jobs.

Lincolnshire’s ’New Deal’ announcement is part of a comprehensive plan by the Government to “build, build, build”, delivering upgrades to local infrastructure and boosting skills in a move to fuel economic recovery across the UK.

Thirty-six LEPs and combined authorities are getting a share of a £900 million to support local infrastructure projects which in turn will support economic recovery following the COVID-19 pandemic.

The fund is aimed at improving digital infrastructure, support skills and career opportunities, and transition to a low-carbon economy.

The Prime Minister has also announced that funding will be brought forward for the six towns across Greater Lincolnshire to help them meet the immediate challenges they face owing to the pandemic.

This fast-tracking of investment totalling £5 million will help kick-start activity in towns and high streets across Greater Lincolnshire, ensuring that people can see and feel the benefit as soon as possible. Read the full article on the GLLEP website.

Status Update on Local Authority Discretionary Grant Funds

  • Boston Borough Council – Open with no current end date
  • City of Lincoln Council – Round 4 opened 6th July targeting micro businesses with grants under £2.5k available
  • East Lindsey District Council – CLOSED
  • North East Lincolnshire council – CLOSED
  • North Kesteven District Council – CLOSED
  • North Lincolnshire Council –2nd round closing midnight 8th July (today)
  • Rutland Council – Open
  • South Holland District Council – Open and reviewing widening access in a further call.
  • South Kesteven District Council – CLOSED
  • West Lindsey District Council – Open and criteria amended to open up to a wider group of businesses.