Yesterday we saw a further £30bn of support to try and kickstart the economy and encourage spending. Whilst this is a massive figure, our opinion is that there are likely to be further announcements in the Autumn statement and extensions of schemes already in place.
Here is a summary of what was announced yesterday;
Six-month VAT cut for attractions, hotels and restaurants
- VAT rate cut from 20% to 5% from 13 July to 12 January 2021.
- Food and non-alcoholic drinks in restaurants, pubs and cafes, as well as hot takeaway food will be covered
- Accommodation in hotels and B&Bs and admission to attractions such as theme parks and cinemas also affected. We are waiting for further guidance from the HMRC.
‘Job retention bonus’
- A scheme to encourage companies to retain furloughed staff.
- Applies to workers earning more than £520 per month.
- A one-off £1000 payment to employers for every furloughed employee retained to the end of January 2021
Stamp duty cut and ‘green homes grant’
- Stamp duty threshold on residential property in England and Northern Ireland will rise from £125,000 to £500,000
- Applies immediately until 31 March 2021. This means that around nine out of 10 transactions would be tax-free as a result.
- Also available is up to £5,000 per home for improvements to make homes more energy efficient in England
- The government will match owners or landlords’ spend, £2 for £1 for most homes
- Up to £10,000 per household fully funded for low-income households
Discount on restaurant meals in August
- “Eat out to help out” scheme will be a 50% discount for every diner, up to £10 a head, from Monday to Wednesday throughout August (including children)
- Covers food and non-alcoholic drinks only
- Applies at participating restaurants, pubs, cafes etc
- Restaurant owners can register online and claim the discount in full from the government via an online form.
Kickstart Scheme for young workers
- £2bn fund to pay for six-month work placements for 16 to 24-year-olds receiving universal credit. Payments cover national minimum wage for 25 hours per week, plus national insurance and pension contributions for Great Britain
- £2,000 grant for employers per apprentice under 25 hired, £1,500 for those over 25, for six months starting 1 August in England only.
- £1,000 grant per trainee for employers who take on trainees aged 16-24 in England, aiming to triple trainee numbers
- £150m extra for the Flexible Support Fund, which provides help for jobseekers in Great Britain.
- Doubling the number of work coaches at Jobcentre Plus across Great Britain, with extra help for young jobseekers
- £101m to fund studies for 18 to 19-year-olds in England unable to find work
- £95m to expand the Work and Health Programme to provide additional support for unemployed people on benefits for more than three months
- A job-finding support service for those out of work for less than three months, costing £40m
- £32m over two years for a National Careers Service to provide advice on work and training in England only.
Infrastructure and decarbonisation
- £1bn of grants to public sector bodies to improve energy efficiency.
- £50m towards a social housing decarbonisation fund, aimed to improve the energy efficiency of socially rented homes.
- The Chancellor also gave further details of a £5.6bn package of infrastructure measures, previously announced by the Prime Minister on 30 June.
- This includes measures for hospitals, school buildings, transport, and housing.