SUMMER ECONOMIC UPDATE

Published 10 July 2020

Here are the highlights from the Chancellor's speech on Wednesday during which he unveiled further support from the Government in what he described as the "second phase in the Government's economic response to the crisis."


JOB RETENTION BONUS

The Chancellor announced a Job Retention Bonus to cushion expected redundancies when the Coronavirus Job Retention scheme ends in October.

The new scheme will give employers £1,000 for each previously furloughed employee they retain and keep in employment until January 2021, as long as they are paid at least £520 a month.

Further details of the scheme are expected later in July.


KICKSTART SCHEME AND MEASURES TO HELP PEOPLE FIND WORK

The Chancellor announced the Kickstart Scheme which will provide £2 billion to support the creation of “high quality” six-month work placements for people aged 16-24 on Universal Credit and at risk of long-term unemployment.
 
The Government will provide funding equivalent to 100% of the relevant level of the National Minimum Wage for 25 hours a week for employers that offer the placements. The associated Employer NICs and minimum automatic enrolment pension contributions will also be covered.
 
The apprenticeships funding will provide £2,000 to employers in England for every apprentice hired under the age of 25 and £1,500 for each newly hired apprentice aged 25 or older. This funding is in addition to schemes already in place to support employers in taking on apprentices.


VALUE ADDED TAX REDUCED RATE FOR HOSPITALITY AND TOURISM SECTORS

The Chancellor outlined a VAT rate cut from 20% to 5% for the Hospitality and Tourism sectors.
 
The measures relate specifically to food and non-alcoholic drinks and to accommodation and admission to attractions.
 
That VAT rate change comes into effect on Wednesday 15 July 2020 and will be in place until 12 January 2021. 


THE "EAT OUT TO HELP OUT" SCHEME

The "Eat Out to Help Out” scheme will provide a discount of 50% of up to £10 per person on eat-in meals (including non-alcoholic drinks).

​The scheme is only available at participating establishments on Mondays, Tuesdays and Wednesdays for the month of August.

Restaurants, cafes and pubs can sign-up for the scheme on Monday 13 July 2020.


STAMP DUTY LAND TAX HOLIDAY
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There is a temporary cut in Stamp Duty Land Tax from 8 July 2020 by raising the nil-rate band from £125,000 to £500,000 until 31 March 2021.
 
The Treasury estimates that around 9 in 10 people buying a main residence will pay no Stamp Duty Land Tax.

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We will do our best to keep you informed as the Government releases further information.