Summer Statement Summary - Government try to lift economy from under the weight of the pandemic
Rishi Sunak has delivered his "Summer Statement", designed at giving a timely, albeit temporary boost to the UK economy, against the back drop of a deep global recession.
We've summarised the key points below
Job Retention bonus.
This is a one-off payment of £1,000 to employers that have used the Coronavirus Job Retention Scheme (CJRS) for each furloughed employee who remains continuously employed until 31 January 2021. The bonus will provide additional support to retain employees.
To be eligible, employees will need to:
earn at least £520 per month (above the Lower Earnings Limit) on average for November, December and January
have been furloughed at any point and legitimately claimed for under the Coronavirus Job Retention Scheme
have been continuously employed up until at least 31 January 2021.
Employers will be able to claim the bonus from February 2021 once accurate RTI data to 31 January has been received. More information about this scheme will be available by 31 July and full guidance will be published in the Autumn.
Job Creation & Training
The ‘kickstart scheme’ will see the government subsidise jobs for 16 to 24-year-olds receiving universal credit benefits.
For each job on the scheme, the Treasury will pay 100 per cent of the minimum wage for 25 hours a week with employers able to top up that amount for 6 months.
These will have to be new, meaningful jobs with training provided. The Scheme opens to employers next month for employers to register.
The government will also invest £111 million for "traineeships" in young people.
Traineeships last from six weeks to six months and provide maths, English and CV writing training. They also provide a work placement of 60-90 hours.
Businesses will also get a bonus payment from the government for every trainee they offer a work experience placement to.
The UK government has increased the Stamp Duty Land Tax (SDLT) threshold in England and Northern Ireland – under which no SDLT is paid on the purchase of a main home from £125,000 to £500,000, with immediate effect until 31 March 2021.
VAT reduction – from 15 July until 12 January 2021, the UK government will cut VAT from 20% to 5% on any eat-in or hot takeaway food and drinks from restaurants, cafes and pubs, excluding alcohol. This VAT reduction also applies to all holiday accommodation in hotels, B&Bs, campsites and caravan sites, as well as attractions like cinemas, theme parks and zoos
Eat Out to Help Out
The aim here is to get customers back into restaurants and pubs. In August everyone will be entitled an eat out to help out discount at any establishment registered with the Scheme. This will mean 50% off the bill for food and drink (excluding alcohol) at registered businesses on Mondays to Wednesdays throughout August. (Max of £10 a head). Businesses must register to participate and recieve the government subsidy towards the customer discounts.
Green Homes Grant
The Green Homes Grant scheme will see households receive vouchers worth up to £5,000 to use on environmentally-friendly additions such as insulation, low-energy lighting, double glazing and energy-efficient doors.
The idea is that Government will pay at least two-thirds of the cost of home improvements that save energy, up to that value.
So...the Stamp Duty reduction is in immediate effect while, the VAT reduction starts next week and Eat Out to Help out starts in August. We are awaiting further guidance on exact dates for with regards to the Job Retention Bonus (online for claims starting February 2021) , and the detailed process about registering for as employers for the Kickstart scheme and "Traineeships".
In summary the measures are designed to protect and lift employment as well as giving some temporary aid to the severely damaged hospitality sector.
We'll continue to update as and when schemes are launched or become available, but in the meantime please do contact us with any questions or concerns.