Norwich: 01603 616300

Summer Statement: Key Points

July 2020

Chancellor Rishi Sunak has delivered a summer statement, outlining his plans to help the economy recover from the damage done by COVID-19. In this blog post, our Tax Specialist, Chris Lock summarises all the key points and explains how they might affect your business and personal finances. 

Photo of Rishi Sunak

Jobs and Wages 

The chancellor has announced various schemes to incentivise employers to bring furloughed employees back to work, to encourage them to employ young workers, and to improve skills training. 

New £9bn Job Retention Bonus scheme 

The government will pay businesses’ a one-off payment of £1,000 for every furloughed employee who remains continuously employed until the end of January 2021. Employees that were furloughed who have previously received support from the job retention scheme will qualify as eligible employees for a business to claim this bonus for each employee retained. 

The employee’s average monthly earnings between the 1st October 2020 and the 31st January 2020 must also be above £520. Payments are currently planned to be made to businesses in February 2021 for eligible employees. Although a small amount of further support it will provide a welcome cash flow bonus to businesses for each furloughed employee retained up to the end of January 2021. 

£2bn “kickstart” work placement scheme 

Up to 300,000 16 to 24-year-olds who are on universal credit will be funded by the government for six-month work placement schemes. The government will fund these young workers in your business for six months for 25 hours each week up to minimum wage.  This means that for a 24 year old the grant will be approximately £5,525.  It is worth noting the scheme will not available to apprentices. 

Traineeship funding  

Businesses will also be funded to provide trainees ages 16-24 with work experience with this capped at £1,000 per trainee.   

£2000 apprenticeship bonus 

Firms will be paid a bonus of £2,000 for each new apprenticeship they create from the 1st August to the 31st January 2020 for apprentices aged under 25. There will be an additional bonus of £1,500 for every apprentice who is hired over the age of 25. This will be in addition to the existing £1,000 that is in place for qualifying apprentices. 

These trainee and apprenticeship incentives expand on the current incentives in place to hire apprentices and as businesses recover from the COVID–19 pandemic, it will be another incentive to invest in developing and growing your workforce. 

Out and About  

Temporary VAT cuts 

Diners will get a 50% discount off their restaurant bill during August, labelled the “Eat Out to Help Out” scheme. The deal means people can get up to £10 off per head if they eat out between Monday and Wednesday. The discount will be able to be used by customers unlimited times in August on eat in meals including non-alcoholic drinks.   

Restaurants will need to apply to participate in the scheme with the government fully reimbursing the business for the 50% discount. 

This measure will also help to bring customers back into cafes, restaurants and pubs which have taken such a significant impact from the pandemic.  Businesses will need to participate in the scheme to receive funding and hopefully the application and payment to eligible businesses from the government will be swift to support the cash flows of businesses that have been badly affected. 

Property 

The chancellor has announced a temporary holiday on stamp duty for residential property purchases in England and Northern Ireland. The nil rate band for residential purchases has been increased from £125,000 to £500,000 and this will apply from the 8th July 2020 to the 31st March 2021. This is to provide a welcome boost to the currently declining property market and help many prospective buyers save thousands of pounds on property purchases.  

The stamp duty relief also applies to buyers of additional properties such as a second home or a buy to let property.  Stamp duty will be payable at 3% on the first £500,000 so now is a good time to look into buying to take advantage of these stamp duty cuts. 

The government has implemented measures over the last number of years to increase the tax collected from landlords each year.  With this temporary stamp duty cut now is the perfect time to assess your portfolio, to either look into reinvesting into new properties or a restructuring of your property portfolio which we can assist with to maximise your tax savings and return on your investment. 

Hundreds of thousands of homeowners will also receive vouchers of up to £5,000 that can be used for energy-saving home improvements, with low-income households getting up to £10,000. 

If you would like to discuss any of these announcements in more detail, please contact us. 

Leave a Reply

Your email address will not be published. Required fields are marked *

Sign up for our news and business insight newsletter

No spam. No waffle. Just useful, practical and valuable news and insight, straight to your inbox. We always protect your personal data.

Aston Shaw Twitter Logo

We act as a representative, allowing smaller employers to pool together to take advantage of the Kickstart Scheme. Find out more on our website 👉…

Last week from Aston Shaw's Twitter via Twitter Web App

Client Login

Secure Document Exchange Login

To request access to use the Client Login feature, please email:


client@astonshaw.co.uk

Username:
Password:

You have Successfully Subscribed!

Secure Document Exchange Login

Please email or call your Client Manager directly to be set up with access or if you have lost your login credentials.


Username:
Password:

You have Successfully Subscribed!