Rishi Sunak’s statement was full of incentives and stimulus designed to keep the economy afloat and people employed. The reliefs seem to be focussed in the main on increased spending, rather than cutting personal and corporate tax rates, and we have summarised what we consider the main points from the Summer Statement below.
Bonuses for furloughed employees
If you are an employer and you bring someone back to work who has been furloughed and you continue to employ them until Jan 31st 2021, the Government will give you a bonus of £1,000.
In order to qualify the employee must earn a minimum of £520 per month.
If you are an employer and you create new jobs for people aged 16-24 that are on Universal Credit and at risk of long term unemployment, the Government will pay six months salary 25 hours per week at minimum wage.
Application for the kickstart grant worth around £6.5k opens next month with kickstarters starting jobs from the autumn.
The minimum wage hourly rates from 1st April 2020 are:
|Age 25 and over||£8.72|
|Age 21 to 24||£8.20|
|Age 18 to 20||£6.45|
|Age under 18||£4.55|
If you employ apprentices, the government will pay a bonus of £2,000 per apprentice hired for under 25s and £1,500 for over 25s in addition to the existing £1,000 for new apprentices aged 16-18.
The hospitality sector is to enjoy a reduced rate of VAT from Wednesday 15th July to 12th January 2021. Between these dates the VAT rate will be reduced from the standard 20% to 5%.
The reduced VAT rate will apply to:
- Food and non-alcoholic drinks supplied by restaurants, pubs, bars, cafés and similar premises across the UK.
- Accommodation costs and admission to attractions across the UK.
Eat out to help out
Designed to encourage people to return to eating out, the Government’s new Eat Out to Help Out discount scheme will provide a 50% reduction (up to a maximum of £10 per head) for sit-down, eat-in meals in cafes, restaurants and pubs across the UK.
This reduction will include non-alcoholic drinks, but will NOT include alcoholic drinks. The discount applies to any participating restaurant, café, pub or other eligible food service establishment.
The discount can be used unlimited times for the entire month of August 2020 across the UK. Participating establishments will be fully reimbursed for the 50% discount.
Stamp duty thresholds have increased from £125k to £500k until March 2021 and the temporary SDLT rates for buying their own home are as follows:
Up to £500,000
The next £425,000 (the portion from £500,001 to £925,000)
The next £575,000 (the portion from £925,001 to £1.5 million)
The remaining amount (the portion above £1.5 million)
*A 3% surcharge will still apply for people seeking to purchase a buy to let
As always, we are here to advise and help where we can, if you have any questions please get in touch with the team. We're all more than happy to help you navigate through these unprecedented times.