Today’s Summer Statement by the Chancellor was an interim statement to introduce measures to support the economy as it reopens, focusing on the hardest hit sectors and on job creation for young people. The full Budget range of measures will be announced in the Autumn.
The measures announced in the Chancellor’s Summer Statement fall into 4 main areas:
– Job protection
– Job creation
– Hospitality and leisure sector stimulus
– Housing market stimulus
Job Retention Bonus
The government will introduce a one-off payment of £1,000 to UK employers for every furloughed employee who remains continuously employed through to the end of January 2021. Employees must earn above the Lower Earnings Limit (£520 per month) on average between the end of the Coronavirus Job Retention Scheme and the end of January 2021. Payments will be made from February 2021. Further detail about the scheme will be announced by the end of July.
Various measures were announced including:
Payments for employers who hire new apprentices
The government will introduce a new payment of £2,000 to employers in England for each new apprentice they hire aged under 25, and a £1,500 payment for each new apprentice they hire aged 25 and over, from 1 August 2020 to 31 January 2021. These payments will be 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 – where that applies.
The government will introduce a new Kickstart Scheme in Great Britain, a £2 billion fund to create hundreds of thousands of high quality 6-month work placements aimed at those aged 16-24 who are on Universal Credit and are deemed to be at risk of long-term unemployment. Funding available for each job will cover 100% of the relevant National Minimum Wage for 25 hours a week, plus the associated employer National Insurance contributions and employer minimum automatic enrolment contributions. Employers will be able to top this wage up.
The government will also support people to build the skills they need to get into work, with a substantial expansion of existing provision, providing funding to triple the number of traineeships and sector-based work academy placements, which enable people to work while training.
As part of this, the government will provide an additional £111 million this year for traineeships in England, to fund high quality work placements and training for 16-24 year olds. This funding is enough to triple participation in traineeships. For the first time ever, the government will fund employers who provide trainees with work experience, at a rate of £1,000 per trainee.
Hospitality and leisure sector stimulus
Eat Out to Help Out
The scheme will entitle every diner to a 50% discount of up to £10 per head on their meal, at any participating restaurant, café, pub or other eligible food service establishment. The discount can be used unlimited times and will be valid Monday to Wednesday on any eat-in meal (including on non-alcoholic drinks) for the entire month of August 2020 across the UK. Participating establishments will need to register online to participate and will be fully reimbursed for the 50% discount. Details of the new website have not yet been announced.
Temporary VAT cut for food and non-alcoholic drinks
From 15 July 2020 to 12 January 2021, to support businesses and jobs in the hospitality sector, the reduced 5% rate of VAT will apply to supplies of food and non-alcoholic drinks from restaurants, pubs, bars, cafés and similar premises across the UK. Further guidance on the scope of this relief will be published by HMRC in the coming days. It remains to be seen whether take away businesses which are not part of a restaurant will qualify.
Temporary VAT cut for accommodation and attractions
From 15 July 2020 to 12 January 2021, to support businesses and jobs, the reduced 5% rate of VAT will apply to supplies of accommodation and admission to attractions across the UK. Further guidance on the scope of this relief will be published by HMRC in the coming days. The details of exactly which types of business will be included in the reduced rate have not yet been published. In his speech, the Chancellor mentioned hotels, B&Bs and caravan parks for accommodation and theme parks, cinemas and zoos as attractions.
Housing market stimulus
Temporary Stamp Duty Land Tax (SDLT) cut on residential property purchases
The current £125,000 nil rate band will increase to £500,000. This will apply from 8 July 2020 until 31 March 2021 and cut the tax due for everyone who would have paid SDLT. Nearly nine out of ten people getting on or moving up the property ladder will pay no SDLT at all.
SDLT is devolved, so this cut only applies to England & Northern Ireland. We would expect similar cuts in the coming days or weeks to be announced by the devolved Scottish Government and Welsh Assembly.
Green Homes Grant
The government will introduce a £2 billion Green Homes Grant, providing at least £2 for every £1 homeowners and landlords spend to make their homes more energy efficient, up to £5,000 per household. For those on the lowest incomes, the scheme will fully fund energy efficiency measures of up to £10,000 per household. Details are yet to be announced.
For the latest details and advice on the Coronavirus Job Retention Scheme and Self-Employed Income Support Scheme, please visit our blogs on these topics using the links below.
This information is correct as of 8 July 2020. This blog is for general guidance only. Recipients should not act upon any of the information provided without seeking specific professional advice tailored to your circumstances, requirements or needs. Please contact PM+M before making any decisions based on any matters relating to this blog.