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Chancellor Rishi Sunak delivered a Summer Statement on 8 July outlining his ambitions for economic recovery…
The UK is now in the second stage of the Government's three stage coronavirus recovery strategy. On Wednesday 8 July the Chancellor, Rishi Sunak, delivered the 2020 Summer Statement announcing financial support for specific businesses recovering from the impact of the pandemic. There were tax cuts to help the residential property market recover, as well as tax cuts intended to reignite the UK's hospitality sector (restaurants, tourism etc.).
As well as confirming there will be an Autumn Statement later this year with more changes, the Chancellor reiterated that the Coronavirus Job Retention Scheme will not be extended past October. F&L will continue to keep you informed of any changes but the next significant update on financial support measures may not be until October.
Tourism & Leisure Temporary VAT Cut
In an effort to help stimulate the sector, the Chancellor announced a cut in VAT from 20% to 5% effective from 15 July 2020 to 12 January 2021. It is not yet clear whether the cut will benefit businesses or consumers but the reduced rate will apply to supplies of food and non-alcoholic drinks from cafés, restaurants, pubs, bars, hotels and guest houses as well as admission to zoos, theme parks, cinemas and theatres.
Also announced in the Summer Statement was the “Eat Out to Help Out” scheme entitling those eating at participating venues to a 50% discount on their meal, up to £10 per head (including children), with participating companies being fully reimbursed for the discount applied. The discount will only be available between Monday and Wednesday throughout August 2020.
Residential Property Taxes
The Nil Rate Band of Residential SDLT (Stamp Duty) will temporarily increase to £500k until 31 March 2021 in a bid to support the construction and housing sectors. Buyers will not have to pay any SDLT on properties bought for less than £500k.
Job Retention Bonus
Those UK employers who have utilised the Job Retention Scheme who have either already brought back or who are bringing back employees from furloughed leave and who continue to employ those employees until 31 January 2021, will receive a one off payment of £1,000 per employee from February 2021. Employees must be earning at least £520 per month between 31 October 2020 and 31 January 2021 for an employer to be eligible.
Tackling Youth Unemployment
In a move likely designed to benefit the low-skilled, the Government has created a £2bn fund to accommodate six month work placements for 16 to 24 year olds who are receiving Universal Credit and deemed to be at risk of long term unemployment. The Kickstart Scheme will cover 100% of the National Minimum Wage for 25 hours per week, as well as the associated employer social security and workplace pension costs.
Employers providing 16 to 24 year old trainees with up to six months unpaid work experience will now receive £1,000 per trainee.
Alongside the existing £1,000 payment given to employers in England who take on 16 to 18 year old apprentices, employers will now receive an additional one off payment of £2,000 for every apprentice hired between 1 August 2020 and 31 January 2021 who is under 25 years old - or £1,500 for those aged over 25.
The details of how each measure will work in practice is expected to be released in the coming weeks. If you would like more information on how your company could benefit, please contact your usual F&L representative or email firstname.lastname@example.org.