Summer Economic Update

After much speculation about what would be included, the Chancellor, Rishi Sunak, delivered his ‘Summer Economic Update’ yesterday. The speech was used to unveil the Government’s Plan for Jobs, which the Chancellor is billing as the second phase in the Government’s economic response to the crisis. The announcement included the following;

Job Retention Bonus

This is a new scheme that will apply once the Coronavirus Job Retention Scheme has closed in October 2020. A payment of £1,000 will be made to employers, for every worker that they had previously furloughed and have retained continuously on the payroll until the end of January 2021. To be eligible, employees will need to earn at least £520 per month on average for November 2020 – January 2021. They will also need to been furloughed at some point during March – October 2020. Employers will be able to claim the bonus from February 2021, once all of the relevant RTI payroll information has been submitted. Further details of this scheme are expected by 31 July, with full guidance due in the Autumn.

Kickstart Scheme

The Kickstart Scheme is aimed at support the creation of high quality six month placements for 16 – 24 years on Universal Credit. The apprenticeships funding will provide £2,000 to employers in England for every apprentice hired under the age of 25 and £1,500 for each newly hired apprentice aged 25 or older. This funding is in addition to schemes already in place to support employers in taking on apprentices.

Reduction in Stamp Duty Land Tax

A temporary cut to Stamp Duty Land Tax (SDLT) was announced. The nil-rate band is to increase from £125,000 to £500,000 on residential property purchases that are completed between now and 31 March 2021.

VAT cut for Hospitality and Tourism Sectors

The VAT rate for the Hospitality and Tourism sectors is to be cut from 20% to 5%. The measures relate specifically to food and non-alcoholic drinks, as well as accommodation and admission to attractions. Further details expected to be published later.

The change comes into effect on Wednesday 15 July 2020 and will be in place temporarily until 12 January 2021.

Eat Out to Help Out  

Eat Out to Help Out scheme will provide a discount of 50 per cent on the total cost of a meal and non-alcoholic drinks, up to a maximum of £10 per person on Mondays, Tuesdays and Wednesdays in August 2020. It has not yet been confirmed how the VAT ( at the new lower rate) will be applied to these vouchers.

A website for the restaurants, cafes and pubs and other eligible food venues, will be set up and those taking part will display a sign at their establishment. It is expected that the website will launch on Monday 13 July 2020.

It is expected that further details will be issued over the coming days and weeks regarding the above schemes and we will provide further commentary as and when this is available

View official documents