Today, 8 July 2020, UK Chancellor Rishi Sunak presented his plans for how the UK economy can start to recover from the Coronavirus pandemic. Read on to find out what was covered in his latest economic statement.
Plan for Jobs: Protect, support and create
The Chancellor is under pressure to do as much as possible to protect jobs in the UK amid concerns that the end of the furlough scheme could spark a huge wave of redundancies. He confirmed the furlough scheme “cannot and should not go on forever” and, as previously stated, will wind down gradually until October 2020.
To help bring staff back from furlough and create new positions, the government has pledged to:
1. Pay employers a job retention bonus of £1,000 per employee for any staff member brought back to employment from furlough who has continuous employment through to January 2021 and earns at least £520 on average, in each month from November to the end of January.
2. Provide 30,000 new traineeships for young people, giving firms £1,000 for each new work experience spot they offer.
3. Pay businesses £2,000 for the next six months, to hire young apprentices. There will also be a new bonus introduced to hire apprentices 25 years old and over, with a payment of £1,500.
4. Plan to double the number of work coaches at job centres to help get people back into work.
A kickstart scheme
The Chancellor also announced a £2 billion "kickstart scheme" to create more jobs for young people. The fund will subsidise six-month work placements for people on Universal Credit aged between 16 and 24, who are at risk of long-term unemployment. This will start in the Autumn and there will be no cap on the number of available positions. It will need to be a new job and be at least 25 hours per week.
Stamp duty “holiday”
The stamp duty exemption threshold will be raised to £500,000 from £125,000, meaning anyone
(not just first-time buyers) purchasing a house up to this value will not have to pay any stamp duty.
This is effective immediately and will be available until 31 March 2021.
Dining out discounts
The hospitality sector has been hit particularly hard by the pandemic and tax relief could help some businesses stay afloat. The Chancellor has therefore cut VAT from 20% to 5% for the hospitality and tourism industries for six months. This will be on food, accommodation and attractions up until 12 January 2021.
The Chancellor also confirmed an “Eat Out to Help Out” scheme that will be available for the month of August and will mean anyone eating out Monday to Wednesday will receive 50% off their food
up to £10 per person. Businesses in the restaurant industry will need to register with the scheme before they are able to offer the “Eat Out to Help Out” discount and to claim cash back from the scheme. The refund will be transferred into restaurants’, cafes’ and pubs' bank accounts within five working days and claims can be made through the website currently being set up. Customers will only receive the discount if they eat out at a registered business.
Going Green on investments
The government will also set aside £3 billion to create green jobs and improve the energy efficiency of public buildings. As much as £2 billion will be set aside for a green homes grant which will give households vouchers of up to £5,000 to spend on energy efficiency schemes such as loft lagging and floor insulation.
Assistance for arts and culture
The culture secretary Oliver Dowden has said a £1.6 billion package of loans and grants will be granted for the arts and heritage sector. This emergency support package is aimed at protecting and preserving “crown jewels” in the arts sector where many heritage sites and venues are on the verge of collapse.
Workers who have coronavirus tests which are paid for by their employer during the 2020/21 tax year, will not have to pay tax on them. They will be exempt from tax that would normally be paid on a ‘benefit in kind’.
If you have any questions about any of the topics in this summary do not hesitate to speak to one of our expert accountants on +44 (0) 20 7759 7553 or email firstname.lastname@example.org.
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