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Summer Statement - Economic Update: A Plan for jobs

With the UK entering its second phase in its recovery from COVID-19, Chancellor Rishi Sunak announced that jobs had to be protected through investment and support. In this second phase, the Chancellor set out a three-point plan for jobs with a clear goal: to protect, support, and create jobs through the measures outlined in his speech, with the message that 'although hardship lies ahead, no one will be left without hope’.

Job Retention Bonus

With the coronavirus job retention scheme (CJRS) being gradually withdrawn at the end of October, a new bonus scheme has been introduced to help support businesses to keep their furloughed employees on. Employers will be rewarded a one-off payment of £1,000 for every furloughed employee who stays employed through to January 2021. The employee must be paid on average a minimum of £520 per month from November (the end of the CJRS) through to the end of January 2021. Further detail on this will be announced by the end of July. 


Kickstart Scheme

In a bid to support the under-25s and those leaving education, this new scheme will directly pay employers who create new additional jobs for 16-24 year olds. To qualify the jobs must be a minimum of 25 hours per week paid at least the national minimum wage and be 'good quality' - involving training and support to find a permanent job. The scheme will pay the young person's wage for six months plus contributions to cover overheads. Employers will be able to apply to take part in the scheme from next month with the first kickstarters expected to be in jobs in the Autumn. 


Additional measures announced to support this include: 


Temporary VAT reduction hospitality sector

To support businesses and jobs in the hospitality sector (supplies of food & non-alcoholic drinks, accommodation & admission to attractions), the VAT rate has been reduced from 20% to 5%, effective from 15th July 2020 until 12th January 2020. 


Eat Out To Help Out

From Monday to Wednesday during the entirety of August, any participating diners, restaurants, cafés & pub will offer a 50% discount of up to £10 per head. This discount applies to any eat-in meal and can be used unlimited times. 

Businesses will need to register, with registration opening from Monday. The businesses will then be able to reclaim their money back each week in August, receiving their funds within 5 working days.


Stamp Duty threshold temporarily increased

To boost the property market and help struggling buyers, the Stamp Duty threshold has been increased to £500,000 until 31st March 2021 in England & Northern Ireland. Currently, Stamp Duty is paid on land or property sold for £125,000+, with it being £300,000 for first-time buyers. 

Anyone purchasing a second property or a buy-to-let will still need to pay the 3% additional stamp duty on the total price of the property. The reduction is effective immediately (8th July 2020) with no changes in Scotland or Wales currently.


Greener Homes

A new £2bn grant is being introduced to help homeowners and landlords make their homes more energy-efficient. The voucher will cover two-thirds of approved work, up to a total of £5,000 per household with low-income households having a limit of up to £10,000.

Only time will tell in these uncertain times on the impact of the above changes. With a £30 billion plan for jobs, it's a question of what will be introduced in the third phase at the Autumn Budget?

 

Tags: Tax, Budget

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