The Chancellor's Summer Statement,
what does it mean for you and your business?
For our Friday wrap up, we take a look at the latest Summer Statement laid out by the Chancellor with the hope of offering clarity on what this could all mean for you and your business...
The Chancellor, Rishi Sunak has unveiled his plans to kickstart the economy after the covid-19 pandemic through actions laid out in his latest mini-Budget.
A key focus of the budget is to give businesses the confidence to retain and hire staff, and to give workers the opportunities and skills they need to get better jobs.
The budget also sets out a plan to offer a much needed boost to the economy by cutting costs for homeowners and buyers and encouraging individuals to start spending on the countries high streets.
For clarity, we’ve highlighted the key points of the budget below;-
Job Retention Bonus
Employers in the UK are set to receive a one-off bonus of £1,000 for each furloughed employee that is brought back to work and remains to be employed as of 31 January 2021.
Employees must earn more than £520 per month on average and payments are currently scheduled to be made from February 2021.
As the furlough scheme is due to be wound down in October, this initiative is aimed at trying to incentivise firms to retain staff and not make them redundant.
Further detail about the scheme is due to be announced in the coming weeks.
Cut in VAT for the tourism and hospitality sector
The rate of Value Added Tax (VAT) applied on most tourism and hospitality-related activities will be cut from 20% to 5% until 12 January, 2021.
Included in the cut will be accommodation and attractions, plus food and non-alcoholic drink.
Along with the ‘Eat Out to Help Out’ scheme, this move is estimated to support over 2.4 million staff within over 150,000 businesses.
Eating out discount scheme
A new ‘Eat Out to Help Out’ discount scheme will provide a 50% reduction for sit-down meals in restaurants, cafes and pubs across the UK from Monday to Wednesday, every week throughout August 2020.
This will entitle diners to a 50% discount (up to the value of £10 per head) on their order, at any participating restaurant, café or pub and can be utilised an unlimited amount of times.
Participating businesses will be able to claim back the money and it has been pledged that this will take no more than five working days to reach their accounts.
For home buyers and owners
Greener home vouchers
Homeowners and landlords in England will be able to apply for vouchers to make their properties more energy efficient in order to protect the environment and to help save on bills.
It’s funded from a £2 billion Green Homes Grant scheme to pay for green improvements such as loft, wall and floor insulation.
The scheme will pay up to two-thirds of costs, up to the value of £5,000 per household. Those on low incomes will be able to claim for the full amount of the work up to £10,000.
Stamp duty ‘holiday’
The threshold to which stamp duty kicks in has been raised with immediate effect from £125,000 to £500,000 until 31 March 2021.
It only applies in England and Northern Ireland but the government estimates that nearly nine out of every 10 people getting on or moving up the ladder will pay no stamp duty at all.
It is designed to help increase confidence with buyers, sellers and those prepared to invest in property. The stamp duty holiday does not currently apply in Scotland or Wales.
For job seekers
A £3 billion green investment package has been created to support around 140,000 green jobs that will work on upgrading buildings and reducing emissions.
This is part of a larger £8.8 billion package set aside for new infrastructure, decarbonisation and maintenance projects.
In addition, a £1 billion programme will make public buildings – including schools and hospitals – greener, helping the country meet its ambitions of achieving Net Zero by 2050.
Kickstart Scheme for young people
A new £2 billion scheme is set to create hundreds of thousands of fully subsidised jobs for young people across the country.
Those aged between 16-24, claiming Universal Credit and at risk of long-term unemployment, will be eligible.
Funding available for each six-month job placement will cover 100% of the National Minimum Wage for up to 25 hours a week. Employers will be able to top this wage up at their discretion.
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 the government already provides for new 16-18-year-old apprentices and those aged under 25 with an Education, Health and Care Plan.
Work coach numbers will be doubled to 27,000 with a £900 million cash injection.
Careers advisors at the National Careers Service will be able to support over 250,000 more young people thanks to a £32 million investment.
Traineeships will be tripled in 2020-21 thanks to a £111 million investment.
Academy placements will also be tripled in 2021, with an extra £17 million of funding.
The next phase of the government’s plan will likely be to set out in the autumn budget with measures implemented to support the longer-term recovery through a Budget and a Spending Review.
These will detail further plans to invest in public service and to support innovation and infrastructure.
Please get in touch if we can assist with any of the above information or with anything else related to your accounts.
Disclaimer: The information contained in this article is intended to be a guide and is not intended to be exhaustive. No action should be taken on the basis of information contained herein without obtaining the necessary advice. No responsibility can be accepted for loss or damages occasioned to any person acting or refraining from acting as a result of the material contained herein.