Today, the chancellor of the exchequer announced a new ‘plan for jobs’ in a statement to the House of Commons.
The plan comprises three parts, which aim to support people to find jobs, create new jobs, and protect existing jobs.
We made recommendations to the Treasury ahead of the statement on the steps the government could take to help the legal services sector recover from coronavirus.
Our submission formed a part of our new Return, Restart and Recovery campaign.
Below we’ve picked out some of the key announcements from the chancellor’s statement that will be of most relevance to solicitor firms.
Jobs retention bonus
The chancellor began by arguing that the job retention scheme (or furlough scheme) cannot continue forever, as some furloughed employees will simply not be able to return to the jobs they had before. He confirmed that the scheme would be brought to a close in October.
However, he announced a new jobs retention bonus to reward employers who bring their furloughed staff back into full-time employment.
This will comprise a £1,000 payment to the firm for each furloughed employee they bring back to work.
In order to qualify for the bonus, the firm must keep that employee in work until January and must pay them at least £520 per month (the lower earnings limit in National Insurance).
The chancellor also confirmed that the bonus would apply to every single one of the nine million people currently on furlough.
Temporary SDLT cut
Noting that property transactions fell by 50% in May, and that uncertainty continues to affect the housing market, the chancellor announced that the property value at which stamp duty land tax (SDLT) begins to be paid will be raised from £125,000 at present to £500,000.
This will take effect immediately and will remain in effect until 31 March.
HM Revenue and Customs has produced guidance on how the new SDLT rates will work.
The chancellor announced a £2 billion ‘kickstart’ scheme to help create new jobs for young people.
The scheme will see employers paid to create new six-month work placements for 16 to 24-year-olds deemed to be at risk of long-term unemployment.
To qualify for the scheme, these jobs need to be:
- at least 25 hours a week
- paid the National Minimum Wage
Employers will also be required to fund training for these ‘kickstarters’ to help them find long-term employment.
The government will pay the wages of kickstarters for six months along with a grant for overheads.
The scheme will open for applications next month, with the first kickstarters to begin work in the autumn.
Law firms will be able to take advantage of the scheme, and we encourage firms as well as in-house teams to consider making use of this programme to boost the number of apprenticeships in the law.
New apprenticeship funding
Until the end of January, the government will pay employers to create new apprenticeships, at a rate of £2,000 per apprentice aged under 25 and £1,500 per apprentice aged over 25.
This will be in addition to the existing £1,000 payments to employers for hiring new apprentices aged 16 to 18, or those aged under 25 with an Education, Health and Care Plan.
Again, law firms are able to take advantage of this scheme to create new legal apprenticeships for young people at their firms.