Last week the Chancellor, Rishi Sunak, delivered his summer statement which contained some key measures aimed at boosting the economy and saving jobs.
More details are beginning to emerge following the statement on Wednesday. A summary of some of the key areas has been provided below by one of our partner businesses Williamson and Croft, who are tax advisers based in Manchester.
Below is an outline of some of the key measures, such as stamp duty cuts and green energy incentives for individuals, job retention bonuses, training and apprenticeship programs for employers, plus cuts to VAT specifically aimed at the hospitality sector.
Chancellor's Summer Statement
We have digested the very limited information available and have outlined the key points below:
Job Retention Bonus
The Government will pay businesses a £1,000 job retention bonus for every furloughed worker who is brought back to work and continually employed until the end of January 2021. Workers must have been continuously employed and earn an average of more than £520 per month in November, December, and January.
There has been no confirmation yet whether this will also apply to directors that have furloughed themselves.
The Chancellor has also confirmed the current job retention scheme will be phased out by the end of October with no further grants payable in relation to this scheme. For details of the current job retention scheme see the below article.
https://www.williamsoncroft.co.uk/changes-to-the-coronavirus-job-retention-scheme/
Stamp Duty Land Tax
The Chancellor announced an emergency stamp duty holiday to help revive the property market. Home buyers will be temporarily exempt from paying the tax for the first £500,000 of any property price, saving them an average of £4,500 with a maximum potential saving of £15,000. The increase in the threshold from £125,000 to £500,000 is effective immediately and will run until the end of March 2021.
Note the additional 3% rate will still apply if you already own a property or if acquiring through a company.
What does this mean for investors?
If you are an investor acquiring an additional property on the market for £400,000 following today's changes you would pay £10,000 less in Stamp Duty Land Tax.
Help for Hospitality
The Government have announced 2 key incentives to assist the hospitality industry;
VAT cut from 20% to 5% on food, accommodation, and attractions, taking effect from 15 July until 12 January 2021.
Every individual will be given an "eat out to help out" discount. Meals eaten at any participating business, Monday to Wednesday, in the month of August will be 50% off up to £10 per head, including children.
We are awaiting further guidance on the above announcements to confirm how exactly businesses can apply for the voucher scheme and whether the VAT cuts will cover areas such as serviced accommodation and short term lets.
Training & Apprenticeships
Mr Sunak also unveiled a new £2bn Kickstart Scheme as a key plank of his “Plan for Jobs”. The fund will create Government-subsidised jobs for unemployed young people and employers will be able to offer a six-month placement for people aged between 16-24. The Treasury will cover 100% of the National Minimum Wage for each young employee for up to 25 hours a week with firms able to top up the worker’s pay.
Businesses are also being offered a £1,000 per trainee payment. The grant will be capped at 10 jobs per firm.
For the next six months, the Government will pay businesses up to £2,000 for every new apprentice under the age of 25. It will also pay £1,500 for every new apprentice over 25 hired.
Greening the Recovery
Homeowners can benefit from £2bn of grants to pay for “green” upgrades to make their houses more energy efficient. Vouchers worth up to £10,000 are available to make upgrades such as loft and wall insulation. It will provide at least £2 for every £1 homeowners spend on making their properties more energy efficient and the Treasury expects the measure to support more than 100,000 green jobs.
A final word on updates...
Whilst the majority of the announcements are welcomed, the details of how they are being rolled out are still being finalised. We will keep things under review and update you on any key changes in future bulletins.
In the meantime we hope this proves useful – if you have any questions regarding the Chancellor’s statement or any other matter relating to your finances please feel free to get in touch.
