The Chancellor set out new measures in his Summer Statement today aimed at reviving the economy from its COVID slump.
At this early stage, the announcements are characteristically light in detail, but we’ve summarised the key points below:
The Chancellor confirmed that the existing furlough scheme will cease on 31st October. However, a new “Job Retention Scheme” will apply from November. The scheme will reward employers who bring back furloughed staff who are being paid a minimum of £520 per month and retained until January with a grant of £1,000 per person from the Government.
This is welcomed, but we await to see the details to understand which returning employees will qualify and clarification on the timeframe in which the employees need to return to work.
Training, apprenticeships and “Kick Start” Scheme
There are new schemes to support employers who create new jobs or training or apprenticeship schemes.
Under the “Kick Start” scheme for new jobs, the Government will pay the first six months of wages and contribute towards overheads, up to £6,500 per employee. To qualify these new jobs will need to be for a minimum of 25 hours per week.
For new traineeships and apprenticeships, employers will receive grants of £1,000 and £2,000 respectively and an additional £1,500 for apprentices over the age of 24.
Stamp Duty Land Tax
In addition to significant infrastructure spend to support the Construction Industry, Stamp Duty Land Tax on residential property is to be reduced to 0% on the first £500,000 of the purchase price until 31st March 2021. However, the 3% surcharge for additional homes will still apply to buy-to-lets and second homes, although the rates payable overall will be lower due to the increased 0% band.
Hospitality and Tourism
The Hospitality and Tourism sectors are to be supported with a reduction in VAT to 5% from Wednesday 15th July until 12th January 2021. This cut will apply to eat-in or hot takeaway food from restaurants, cafes and pubs, accommodation in hotels, B&Bs, campsites and caravan sites, attractions like cinemas, theme parks and zoos.
An “Eat Out to Help Out” scheme providing a 50% discount up to £10 per head at participating restaurants on Mondays to Wednesdays will be introduced for August. The participating restaurants can claim the discount back from the Government and be paid within five working days. Restaurants can apply for the scheme from Monday 13th July.
A new voucher scheme of £5k per household or £10k for low-income households has been announced to create more energy-efficient homes.
We await further details on these new initiatives, and we will update you and provide guidance as more information is made available. If you would like to discuss how these initiatives could affect you, then please contact your TC adviser on 0330 088 7111.