Summary of the chancellor’s summer statement, July 2020

On 8 July 2020, the Chancellor Rishi Sunak unveiled a summer statement designed to boost the UK economy with stimulus for consumer spending as well as job creation measures.

Alan McCann from DTE Tax Consultancy created a brief summary of the announcements:

Furloughed Worker Bonuses 

The Treasury will pay employers £1,000 for each furloughed employee they bring back to work. The conditions of the payment are:

someone who was furloughed at any time,  has to be continuously employed through to 31ST January 2021, and is paid at least £520 per month on average from November 2020 to 31ST January 2021. The £520 is equal to the current lower earnings threshold for class 1 National Insurance. 

The £1,000 seems small but is welcomed. 

Green Home Grants 

The Government is to make available grants designed to meet up to 2/3 of the cost of energy saving insulation in homes. The grants will be up to £5,000 per household.  In addition, low income households will be able to cover the full cost of the work up to £10,000.  

The Chancellor believes these grants will support 140,000 jobs and reduce carbon emissions. 

Stamp Duty – Your home 

To boost the housing and construction sectors, with immediate effect, the stamp duty threshold of £125,000 will be increased to £500,000, meaning no duty is paid on purchases up to this limit. 

This reduction is temporary and will last until 31st March 2021.  Special rules will continue to apply for additional properties and companies. 

Hospitality and Tourism Industries – VAT Reduction/Special rate 

With effect from 15th July 2020, and until 12 January 2021, the VAT rate is reduced to 5% on the following items of expenditure;

food, non-alcoholic drinks, accommodation,  attractions (which include theme parks, cinemas and zoos)

This is a welcomed move to assist this much troubled business sector. It is hoped the saving is passed on to the customer.  

Kickstarter Scheme – Support for young employees  

Under a programme announced today, the wages of 16-24 year olds, starting a new job which provides training and support, will be covered 100% up to the minimum wage, for a maximum of 25 hours a week.  Employers, if they wish to are able to top up wages. 

There will be no cap on the number of places.  

Finally, 

Eat Out to Help Out  

Throughout August 2020, a 50% discount will be available, capped at £10 per hea,  for every diner eating out on Monday, Tuesday and Wednesday.

The government will cover the discount given. In a move to provide proactive support the Treasury have advised that businesses will be able to register to join the scheme from Monday 13th July. The stated aim is to have monies due paid within 5 working days of a claim made. 

The measures announced are targeted at specific sectors. Time will tell us if they are successful.  

If you have any questions about any of the points above, contact us today for further support.

*This article was originally published on DTE website at https://www.dtegroup.com/news/blog/summary-of-the-chancellors-summer-statement/