The Chancellor, Rishi Sunak, has announced a wide-ranging package of measures to try to boost the shrinking economy and save jobs in his Summer Statement on 8 July.
Specific measures announced include:
Job Retention Bonus
There was no extension to the furlough scheme which is winding down over the next few months and ending on 31 October. However there will be a bonus of £1,000 paid to employers for every previously furloughed employee who is brought back and is still employed on 31 January 2021.
To qualify the employee must be paid at least £520 per month on average for the months November 2020 to January 2021. This also seems to apply to employees who have been previously furloughed but are already back at work. More details are awaited on the specifics including how and when the bonuses will be claimed and paid.
The government will fund the cost of wages of newly created jobs for 16-24 year old individuals who are on universal credit. The subsidy will cover 100% of the national minimum wage plus NIC and auto enrolment pension contributions, for a six-month period.
The government will pay a £1,000 subsidy to businesses who provide young trainees with work experience. These will be offered for 16-24 year old individuals with Level 3 qualifications and below.
The government will pay £2,000 to employers in England for each new apprentice businesses hire aged under 25, and £1,500 for apprentices aged 25 and over. The payments will be made for apprentices hired from 1 August 2020 to 31 January 2021.
Increase in Stamp Duty Threshold
The threshold at which Stamp Duty starts to become payable on property purchases in England and Northern Ireland has been raised to £500,000 with immediate effect.
Tiered percentage rates apply to the portion of the price above £500,000 for a house costing more than this figure. The 3% supplement for additional properties continues to apply on top of the new rates but this will still lead to a saving for second homebuyers and landlords.
The reductions apply until 31 March 2021 when the rates will return to the previous levels.
Full details can be found at https://www.gov.uk/guidance/stamp-duty-land-tax-temporary-reduced-rates
VAT Cut for the Hospitality and Tourism Sectors
The rate of VAT is to be cut from 20% to 5% for these hard-hit sectors from 15 July 2020 to 12 January 2021.
The cut applies to eat-in or hot takeaway food and non-alcoholic drinks from restaurants, cafes and pubs together with accommodation in hotels, campsites and caravan sites and also admission costs for attractions like theme parks and cinemas.
Alcoholic drinks served in pubs and restaurants are not included in the concessions.
Discounts on Eating Out in August
Diners can take advantage of a 50% discount on meals and soft drinks when eating out between Monday and Wednesday during the month of August. Again alcoholic drinks are excluded.
The maximum is £10 discount on each occasion but there is no limit on the number of times a customer can participate during the month.
Restaurants, cafes and pubs who want to join the scheme will register on a website which opens on 13 July and can then claim back the discounts they have given weekly during August with the money being paid back to them within 5 days.
Green Homes Grant
The government will introduce a Green Homes Grant to subsidise two thirds of the costs incurred by homeowners and landlords on making their properties more energy efficient.
The grant is capped at £5,000. For the lowest income households, the scheme will fully subsidise these improvements, up to £10,000 per household.
What next from the Government?
The Chancellor has promised a Budget Review in November with his desire that he wants to put back the nation’s finances on a “sustainable footing.” What is unclear at present is whether this will mean tax rises in the short term.
The update provided little for self employed workers and the Chancellor has previously signalled that he wants to review the tax landscape these individuals. It was made clear to the Chancellor at the time of the launch of the Coronavirus Job Retention Scheme the differences in the tax and NIC treatment of employed and self-employed workers. It also highlighted the differences with the taxation of dividends which is particularly relevant for small and medium business owners.