Chancellor of the Exchequer, Rishi Sunak, made his Summer economic update on Wednesday 8 July 2020. We outline his new measures designed to assist in reviving jobs and the economy following the outbreak of the Coronavirus. With predictions that the world will suffer its worst-ever economic recession, the Chancellor anticipates that the UK's economy has shrunk by 25%.
Job Retention Scheme (JRS)
- The Employee Job Retention Scheme (JRS) is due to wind down and it will end in October 2020. "It is a false hope to keep furloughing open forever".
New Jobs Retention Bonus
- A new bonus of £1,000 will be paid to employers for bringing back and retaining furloughed employees until January 2021.
- Employees must be paid at least £520 per month between November 2020 and January 2021.
See A Plan for Jobs 2020: Job Retention Bonus
Kickstart scheme
- The Kickstart scheme will pay employers who take 16 to 24-year-olds for a minimum of 25 hours per week at the National Minimum Wage (NMW).
- The grant will pay the wages or around up to £6,000 for the first six months.
- No cap on the number of places available.
See A Plan for Jobs 2020: Helping the unemployed
Training places
- Pay employers £1,000 to take on new trainees.
- Apprentices: pay employers to create new apprenticeships for under 25 year olds, £2,000 per place.
- £1,500 payment for taking on apprentices aged over 25 years old.
See A Plan for Jobs 2020: Helping the unemployed
Credits claimants
- Back to work coaches to be doubled.
- Increased funding for DWP Supporting long term unemployed.
Job creation
- "Historic investment in infrastructure". Looking to invest in better roads, high streets, hospitals and schools.
Green measures
- £2 billion in green home grants.
- A green homes voucher scheme to make private homes more energy-efficient.
- Providing at least £2 for every £1 spent to homeowners and landlords 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.
- £1bn to improve the energy efficiency of public buildings.
- £50 million on measures to de-carbonise social housing.
See A Plan for Jobs 2020: Green measures
Stamp Duty Land Tax (SDLT)
- The current residential SDLT threshold of £125,000 will rise to £500,000.
- The higher rate of SDLT is reduced for buyers of properties costing up to £500,000.
- Applies from 8 July 2020 until 31 March 2021.
- Applies only to dwellings purchased in England and Northern Ireland.
See Summer Economic Update 2020: Temporary SDLT reduction
Leisure industries
VAT: Temporary VAT cuts
The rate of VAT on food, accommodation, entry fees etc is cut by 20% to 5% for the next six months.
VAT on 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.
VAT on 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
See Summer Economic Update 2020: Temporary VAT cuts
Eat Out to Help Out
- The 'Eat Out to Help Out' scheme aims to encourage people to return to eating out.
- Every diner will be entitled to a 50% discount of up to £10 per head on their meal, at any participating restaurant, café, pub or other eligible food service establishments.
- The discount can be used unlimited times and will be valid Monday to Wednesday on any eat-in meal (including non-alcoholic drinks) for the entire month of August 2020 across the UK.
- Reclaimed by the business which must apply to participate.