On 8th July 2020, the Chancellor announced a number of policies which are being set up to encourage job retention, consumer spending and getting youth back into work. Below are the key points already released, with updates to follow:
- Job Retention Bonus
This offers a fixed £1,000 to be paid to businesses for each employee receiving a minimum monthly wage of £520, who has been taken off furlough and is being retained until at least 31st January 2021.
Exact details of who will qualify are yet to be released, i.e. whether staff on “flexi furlough” count as part of this incentive.
- Stamp Duty Holiday
From 8th July 2020 until 31st March 2021, the Stamp Duty percentage band has been increased from £125,000 to £500,000.
This means that for people looking to buy a house costing under £500,000, there will be no Stamp Duty to pay. Properties exceeding this will be charged at the usual Stamp Duty Rates as follows:
5% from £500,000 to £925,000
10% from £925,001 to £1,500,000
12% from £1,500,001
Prior to the budget, you would pay have paid 2% on property purchased costing between £125,001 and £250,000, and 5% on property purchased costing between £250,001 and £925,000.
Anyone purchasing a property costing more than £500,000 will potentially save £15,000 in Stamp Duty.
Anyone buying a second property will pay an additional 3% on all bands, i.e. 3% up to £500,000, then 8% from £501,000 to £925,000 etc. Such purchasers will still receive the same saving, compared to before the introduction of the Stamp Duty Holiday.
Currently, this only applies to England and Northern Ireland. It is expected Wales & Scotland will follow with a similar scheme, but details are yet to be provided.
- Green Homes Grant
The government will provide up to £5,000 per household for projects which help make the home more energy efficient, i.e. Loft Insulation, or Double Glazing.
This will be done by the government matching every £1 spent with £2 of government support, up to the £5,000 limit.
For low-income families, the government will fully fund such projects up to a value of £10,000.
Exact details of eligibility and which projects will be covered are yet to be released, but expected to be announced in the coming weeks.
- VAT cut for Restaurants, Hotels & Attractions
From 15th July 2020 to 12th January 2021, VAT will be cut from 20% to 5% for all eateries, accommodation providers and entertainment attractions, i.e. Cinemas, Theme Parks.
In theory, this will allow eligible businesses to reduce prices and encourage spending, i.e. a ticket costing £24 (£20 + 20% VAT) will now cost £21 (£20 + 5% VAT).
However, in order to support struggling businesses, it is generally expected they will retain their current prices and receive the additional benefit of having to pay less VAT.
- Discount for Restaurant Meals During August 2020
Throughout August 2020, diners can eat at eligible eateries on Mondays through to Wednesdays and receive a 50% discount of up to £10 per head on their meal (including children).
Restaurants will apply for discount through an on-line form and receive the funds within five working days.
This is a small give-away, which is expected to be taken up by most eateries and might encourage a little extra spending during August.
- Support Schemes for Young Workers
Branded “Kickstart”, this programme will offer six month paid work placements for young people at risk of long-term unemployment, paid at the National Minimum Wage. Reports say that government will fund the wage costs for 25 hours a week, and an administration fee for employers, for around 300,000 jobs. The potential grants available may be:
£1,000 grant per trainee aged 16 – 24
£2,000 grant per apprentice aged 16 – 24
£1,500 grant per apprentice aged 25+
Additional schemes include funds for 18 – 19-year-olds who are unable to find work, additional careers service help, increased Job Centre roles, and more general funds to help job-seekers.
Full details of eligibility, and relevant criteria will be released in the coming weeks.
Please contact us if you would like to discuss any of these schemes by emailing email@example.com or calling us on 01869 277973.