Mini Summer Budget 2020
Yesterday’s budget by the Chancellor of the Exchequer outlined plans to support, protect and create jobs. The government plans to do this by focusing on assisting workers to find work and gain experience, raising demand in the hospitality sectors and increasing infrastructural development to create more jobs. We have put together a summary of the key points raised yesterday and how it will affect you and your businesses. They have been categorised into retaining jobs, protecting jobs and creating jobs.
- CREATING JOBS
Stamp Duty Land Tax (SDLT) cut
The government will increase the Nil Rate Band of Residential SDLT temporarily to £500,000 from £125,000; this will take effect from 8 July 2020 until 31 March 2021. This hopes to reduce the tax due on everyone who would have been subject to SDLT on the purchase of property.
This is great news for Buy to let investors because they will also benefit from the SDLT holiday for any purchase less than £500,000. Investor will still be subject to an additional 3% surcharge, see link for SDLT calculator below.
Green Homes Grant
The government will introduce a Green Homes Grant worth £2 billion will provide a minimum of £2 for every £1 homeowners and landlords spend on making their homes more energy efficient capped at £5000 per household. Households on the lowest incomes will be fully funded on energy efficiency measures capped at £10,000 per household.
Job retention bonus
The Coronavirus Job Retention Scheme will continue to run and will slowly come to a halt in October. In order to encourage businesses to bring back previously furloughed employees, the government has implemented a Job Retention Bonus incentivise employers to retain employees. This will be a singular £1000 payment per every furloughed employee on condition that the employee remains employed up until the end of January 2021 and earns a minimum of £520 per month.
This scheme hopes to create a 6 month work placement scheme for youth aged 16-24 who are at risk of long term employment by introducing a £2 billion fund. This fund will cover the wages of 25 hours a week, the employer NIC contribution and minimum automatic enrolment contribution incurred.
Traineeships for young people
There would also be an additional £111 million to fund the traineeship of 16 – 24 year olds. The government hopes to do this by paying employers who make work experience available, £1000 per trainee.
The government plans to pay £2000 to employer per each new apprentice hired under 25 years and £1500 for new apprentices hired over 25 years form 1st August 2020 to 31st January 2021.
- PROTECTING JOBS
Eat Out to Help Out
This scheme has been introduced to help shield the jobs of workers in the hospitality sector and encourage people to patronise the business. This will be in the form of 50% discount (capped at £10 per head on each meal) at food establishment participating in the scheme. The discount will run from Monday to Wednesday for meals eaten in and the establishments participating in the scheme will receive a full refund for the discount.
VAT cut for food and non- alcoholic drinks
There will be a reduced VAT rate of 5% from 15th July 2020 to 12th January 2021 to assist businesses and jobs in the hospitality sector. This reduced rate would be applicable to food and non-alcoholic drinks from restaurants, pubs cafes and other food establishment.
VAT cut for accommodation and attractions.
There will also be a reduced VAT rate of 5% from 15th July 2020 and 12th January 2021 on the supply of accommodation and attractions in the UK.
The government will issue out a third phase of the recovery plan by autumn which will encourage a longer-term recovery. You can access the full document here.
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