Chancellor Sunak delivered a Summer Economic update today, announcing various new support measures for businesses and individuals. Please find below a summary of the recent announcements. Further detailed information will follow in due course;
1. Job Retention Bonus of £1,000 per employee
2. Kickstart scheme (Grant of around £6,500 per employee)
3. VAT rate slashed to 5% for hospitality and tourism sectors
4. Eat out to Help out discount – 50% off!
5. Stamp duty holiday
1. Job Retention Bonus of £1,000 per employee
Chancellor Sunak announced a ‘jobs retention bonus’ of £1,000 per employee for firms who bring back staff conditional on those earning at least £525 a month until January. Businesses can also apply for a £2,000 bonus for hiring apprentices, with an additional £1,500 for over-25s.
2. Kickstart Scheme (Grant of around £6,500 per employee):
The government is subsidizing jobs for 16 to 24-year-olds receiving Universal Credit benefits. For each job on the scheme, the Treasury will pay 100 per cent of the National Minimum Wage for 25 hours a week with employers able to top up that amount.
For 21 to 24-year-olds that would mean £205 each week, while 18 to 20-year-olds would receive £161.25 and 16 and 17-year-olds would receive £113.75.
As a comparison, under-25s currently receive £85.68 a week on Universal Credit.
If employers meet these conditions the Government will pay young people’s wages for six months plus an amount to cover overheads, meaning that for a 24 year-old, the grant will be around £6,500, according to the chancellor.
Employers can apply to be part of the scheme from this month, with the first ‘kickstarters’ in jobs this autumn, he added.
3. VAT rate slashed to 5% for hospitality and tourism sectors:
From Wednesday, the 15th July 2020 until 12th January 2021, standard VAT rate of 20% has been reduced to 5% on food, accommodation and attractions.
The reduction will apply to eating hot or takeaway food from restaurants, cafes and pubs, accommodation in hotels, B&Bs, campsites, and caravan sites. The VAT cut, effective from next Wednesday, will not apply to alcohol served in pubs or restaurants. The VAT cut will also include attractions such as cinemas, theme parks and zoos.
“This is a £4bn catalyst for the hospitality and tourism sectors benefitting over 150,000 businesses and consumers everywhere,” said Chancellor Sunak, adding that the new measure would help protect £2.4m jobs in the UK.
4. Eat out to Help out Discount – 50% off !
An unprecedented scheme has been launched by the Government, with every single person in the UK entitled to savings on restaurants, cafes and bars in what’s been dubbed as “eat out to help out”.
Restaurants, cafes and pubs have been severely affected by the coronavirus lockdown, with many staff placed on the Government’s furlough scheme.
Businesses will need to register, and can do so through a simple website, open next Monday.
Each week in August, businesses can then claim the money back, with the funds in their bank account within five working days.
As a customer you do not need to do anything to claim your discount, it will be automatically applied to your meal so long as the venue has signed up to the Government’s scheme. The discount will allow customers a maximum discount of £10 off per person, including children.
All you need to do is visit participating restaurants, bars, pubs or cafes in August on a Monday, Tuesday or Wednesday.
5. Stamp Duty Holiday:
If you purchase a residential property between 8 July 2020 to 31 March 2021, you only start to pay SDLT on the amount that you pay for the property above £500,000. These rates apply whether you are buying your first home or have owned property before.
Property or lease premium or transfer value SDLT rate
Up to £500,000 Zero
The next £425,000 (the portion from £500,001 to £925,000) 5%
The next £575,000 (the portion from £925,001 to £1.5 million) 10%
The remaining amount (the portion above £1.5 million) 12%
From 8 July 2020 to 31 March 2021 the special rules for first time buyers are replaced by the reduced rates set out above.
Higher rates for additional properties
The 3% higher rate for purchases of additional dwellings applies on top of revised standard rates above for the period 8 July 2020 to 31 March 2021.
Companies as well as individuals buying residential property worth less than £500,000 will also benefit from these changes, as will companies that buy residential property of any value where they meet the relief conditions from the corporate 15% SDLT charge.
On 1 April 2021, the reduced rates shown in the above tables will revert to the rates of SDLT that were in place prior to 8 July 2020.
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