Chancellor Rishi Sunak announced the Governments economic recovery plan for the UK in his summer economic statement. The plan aims to stimulate economic recovery following the adverse effects of COVID-19. Here is a summary of the announcement.
Introduction of the Job Retention Bonus
As a follow up to the original Coronavirus Job Retention Scheme, which provides grants to eligible employers to cover part of furloughed staff wages, Sunak is encouraging employers to bring back furloughed employees. Employers are to receive £1,000 for each employee that remains employed until at least January 2021.
Temporary VAT rate cut confirmed for hospitality and tourism sector
In order to further support the hospitality and tourism sectors, The Chancellor has announced a temporary reduction in the VAT rate on eligible transactions
The existing 20% VAT rate will be reduced to 5% from July 15th 2020 until January 12th 2021 for businesses operating in the hospitality and tourism industries. Alcoholic beverages sales are to remain at 20% VAT.
“Eat Out to Help Out” – Further stimulus for the Hospitality sector
The Chancellor announced that the government will cover 50% of the bill when dining out in participating restaurants.
The scheme provides a discount of up to £10 per person, and will be available on Mondays, Tuesdays, and Wednesdays.
Restaurants are required to register for the scheme and reclaim the discount from HMRC. The registration service will be available from 13th July 2020.
A Plan For Jobs – Kickstart Scheme
The Kickstart Jobs Scheme is part of the government’s “Plan For Jobs”. This is in response to concerns about the effects of COVID-19 on employment opportunities for young people.
The subsidy is for employers that will employ individuals who are on Universal Credit and aged between 16 and 24. The Government has committed to covering the cost of up-to 25 hours per week for each eligible employee. The amount of reimbursement will be based on the National Minimum Wage.
A Plan for Jobs - Apprenticeship and trainee incentives
Employers are being urged to hire apprentices and trainees following the impact of coronavirus on unemployment. Chancellor Sunak announced that employers hiring apprentices and trainees can apply for the following funding:
£2,000 one off grant for hiring apprentices, (or £1,500 if the apprentice is over the age of 25)
£1,000 one off grant for trainees that are employed
Green homes grants now available
Homeowners in England are encouraged to make environmentally-friendly upgrades to their properties. In return, the Government will provide a contribution of up to two thirds of the cost, to a maximum of £5,000.
Stamp duty holiday plans announced
In a bid to bolster the UK housing market, Sunak announced a temporary change of the stamp duty threshold has been announced. The change immediately increases the threshold before stamp duty becomes payable from £125,000 to £500,000. This will be in effect until the end of March 2021.