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Summer Economic Update

Today the Chancellor delivered his Summer Economic Update and announced a number of new measures to help stimulate the economy as we enter the second phase of the government’s economic response. Here is a round up of the announcements and what they will mean for businesses and individuals in the coming weeks and months:

1. Job Retention Bonus

This bonus will reward employers that bring back their employees from furlough, with the aim of supporting jobs in the UK. Previously furloughed employees must be paid, on average, £520 per month from November to January in order for the employer to qualify. The employer will receive £1,000 per furloughed employee who is still employed as of 31 January 2021.

We anticipate that employers will be able to claim the £1,000 bonus in relation to any employees who have been furloughed (providing they remain continuously employed during the 3 months period to 31 January 2021), but we await further guidance from the government which is to be published before the end of July.

2. Kickstart Scheme

This scheme will directly pay employers to create jobs for those aged 16- 24 that claim Universal Credit and are deemed to be at risk of long-term unemployment. For a six month placement the Government will fund 100% of the National Minimum Wage for 25 hours a week, plus associated employer National Insurance contributions and employer minimum automatic enrolment contributions, plus an amount to cover overheads. Employers will be able to top up this wage and can apply to be part of this scheme from next month, with the first ‘kickstarters’ expected to be in their new jobs by this Autumn.

To read our detailed guidance on the Kickstart scheme please click here

3. Training and Apprenticeships

Businesses in England will receive £2,000 for each new apprentice they hire under the age of 25, and £1,500 for each new apprentice they hire aged 25 and over, from 1st August 2020 to 31 January 2021. This is in addition to the existing £1,000 that the Government already provides for new 16-18 year old apprentices.

The Government will also fund employers providing work experience to trainees at a rate of £1,000 per trainee.

4. VAT in the Hospitality and Tourism Sector

A temporary VAT cut within the hospitality and tourism sector has been announced.  The VAT rate will be reduced from 20% to 5% from 15 July 2020 to 12 January 2021.

This reduction in VAT is intended to boost trade immediately for hotels, B&B’s, cafes, pubs, restaurants, cinemas, zoos and theme parks to name but a few.

Further detail on this can be found here.

5. Stamp Duty Holiday

In order to get the housing market moving, an immediate stamp duty land tax holiday has been granted on properties up to £500,000. This holiday will apply for residential properties purchased in England and Northern Ireland from 8 July 2020 and is in place until 31 March 2021. The 3% higher rate for purchases of additional dwellings still applies.

Further detail on this can be found here.

6. Green Home Grants

In order to increase demand for plumbers, builders and tradespeople, homeowners will receive vouchers to pay for at least two-thirds of green improvements to their homes such as loft, floor and wall insulation up to a maximum of £5,000 per household. 100% Government funding up to £10,000 is available for low income households.

7. Eat Out to Help Out

The Eat Out to Help Out scheme will be introduced to encourage people to return to eating out, thereby providing a boost in demand for cafes, restaurants and pubs. This 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 be fully reimbursed for the 50% discount and will be able to register for the scheme from Monday 13 July.

Further detail on this scheme can be found here.

We await further details from the Government on how some of these schemes will work and how they will be delivered. We will update this page as and when further guidance is released so please make sure to keep checking back.

 

Please click here to go back to advice on other Government measures in response to the coronavirus pandemic.

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