On Wednesday, the Chancellor Rishi Sunak made a speech entitled “Summer Economic Update” where he unveiled further Government supports and the Government’s plan for jobs (Click to view) which he described as the “Second phase in in the Government’s economic response to the crisis.”
Here are the highlights of the new supports available:
CORONAVIRUS JOB RETENTION SCHEME (CJRS) AND JOB RETENTION BONUS
The CJRS ends in October and the Chancellor looked to cushion expected redundancies with the announcement of a Job Retention Bonus (JRB). 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
In order to support people finding jobs, the Chancellor announced the Kickstart Scheme, which will provide £2 billion to support the creation of “high quality” six-month work placements for 16 to 24-year-olds on Universal Credit and at risk of long-term unemployment.
The Government will provide employers that offer the placements funding equivalent to 100 per cent of the relevant level of the National Minimum Wage (NMW) for 25 hours a week. It will also cover the associated Employer NICs and minimum automatic enrolment pension contributions.
Rishi Sunak also outlined additional measures, including funding for traineeships and employers that hire new apprentices, as well as funding for several careers and job-finding programmes.
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 for the Hospitality and Tourism sectors from 20 per cent to five per cent. The measures relate specifically to food and non-alcoholic drinks and to accommodation and admission to attractions, with further details expected to be published later.
The VAT rate change comes into effect on Wednesday 15 July 2020 and will be in place temporarily until 12 January 2021.
EAT OUT TO HELP OUT
The “Eat Out to Help Out” scheme will provide a discount of 50 per cent of up to £10 a person on eat-in meals, including non-alcoholic drinks, at participating establishments on Mondays, Tuesdays and Wednesdays for the month of August.
Restaurants, cafes and pubs can sign-up for the scheme on a new website on Monday 13 July 2020.
STAMP DUTY LAND TAX HOLIDAY AND JOB CREATION MEASURES
There is a temporary cut in Stamp Duty Land Tax (SDLT) from 8 July by raising the nil-rate band from £125,000 to £500,000 until 31 March 2021. The Treasury estimates that, as a consequence, around nine in 10 people buying a main residence will pay no SDLT.
Further details can be found on SDLT changes here: https://www.gov.uk/guidance/stamp-duty-land-tax-temporary-reduced-rates
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