Everything Announced During the Summer Statement
Chancellor Rishi Sunak has announced a range of new measures in the Summer Statement in the aim to help the UK economy recover from COVID-19.
A huge wave of public spending to boost the economy has been announced in what some are calling a mini-Budget. The Summer Statement includes measures to help protect jobs and encourage spending in industries hardest hit by the crisis.
We’ve put together some of the biggest announcements that you need to know about.
Furlough Scheme Ending
As previously announced, the furlough scheme will end in October. Many have worried that this would lead to a spike of redundancies in the Autumn as soon as the scheme ended.
However, to alleviate the pressure on businesses, Sunak has announced that employers will receive a bonus for continuing to employ workers.
The government is offering employers £1,000 for every staff member they keep on after furlough ends. This will cost an estimated £9 billion and should help to curb growing unemployment levels.
VAT Cuts for Hospitality and Tourism Industries
The hardest hit industries during the lockdown were hospitality and tourism businesses. As a way to help ease the strain on these businesses, VAT has been cut from 20% to 5%. This move will last until the 12th of January 2021.
This means that the amount you pay or charge in VAT on things like food, accommodation and tourist attractions will be reduced for six months which should help to boost spending.
Discount for Restaurant Meals
The main headline that grabbed a lot of attention recently was the “Eat Out to Help Out” scheme. Sunak promises everyone will get a 50% discount on meals eaten out in August - up to a maximum of £10 per head.
This is another measure which should help encourage spending in restaurants and bars previously suffering under lockdown measures.
Support for Young People
A new £2 billion “Kickstart scheme” to help reduce unemployment for young people was also announced. The government will subsidise thousands of new jobs for unemployed young people on Universal Credit.
For each job in the scheme, the government will pay 100% of the National Minimum Wage for 25 hours a week for under-25s. This should incentivise employers to take on young people struggling to get into work and also helps to reduce employment costs for struggling businesses.
Stamp Duty Cut
Another cut was announced in the form of Stamp Duty. Starting immediately, the threshold for paying Stamp Duty has been raised from £125,000 to £500,000. This Stamp Duty holiday will last until 31 March 2021 and will help homebuyers save an average of £4,500.
Green Plan and Infrastructure Boost
The Chancellor also unveiled plans to tackle climate change. Sunak confirmed a £3 billion green plan to boost employment and help to upgrade the UK’s infrastructure.
£1bn will be used to improve the energy efficiency of public buildings such as schools and hospitals. The rest will be part of a “Green Homes Grant”. This is a voucher that homeowners can apply for to fund energy efficiency improvements to their home. Whether this will be rolled out to businesses as well is unclear at this moment.
The government has also pledged £5 billion to fast-track infrastructure investment. Prime Minister Boris Johnson said the plan was to “Build back better, build back greener, build back faster and to do that at the pace that this moment requires”.
Overall, there were some ambitious plans put forward during the Summer Statement. It will be interesting to see what else is announced during the Autumn Budget later this year.
If you’re a business with questions about the VAT cut or job retention programmes, get in touch with Countplus today for a chat.