Over recent months, the Chancellor has introduced a wide range of measures designed to support the economy through the coronavirus crisis. From the furlough scheme to small business grants, the Treasury has committed billions to navigate the country through the pandemic.
With the UK set to enter a deep recession, part of the £160 billion budget the government set aside to mitigate the effects of lockdown is now being used to implement plans to protect jobs, improve housing, and support the economic recovery.
In his summer statement last month, the Chancellor, Rishi Sunak, unveiled more measures designed to boost the economy. Here’s what you need to know about them and how they could affect you.
Financial incentives to promote job creation and security
As the Job Retention Scheme approaches its closing date at the end of October and the support provided starts to wind down, Rishi Sunak announced supplementary measures to help prevent further unemployment.
If you’re an employer, you will be encouraged to rehire your furloughed staff through the Job Retention Bonus scheme. Your business will receive a £1,000 bonus for each returning employee who earns at least £520 a month and stays with your business from November to January.
This serves to lower the financial burden on businesses who may not otherwise be able to afford to bring back their staff – in essence, helping businesses stay afloat and letting people keep their jobs.
The government has also set up additional programmes to encourage job creation for young people.
The Kickstart scheme will provide grants for businesses employing people aged 16 to 24 currently claiming Universal Credit.
Businesses can apply to participate in this scheme at any time between August 2020 and January 2021. The government will cover 100% of the wages of each young person working 25 hours per week at minimum wage during a six-month placement. This amounts to approximately £6,500 for a 24-year-old.
“Kickstart will give employers the chance to take on a young person who otherwise might not have got into work and support them to develop, with the costs reimbursed by government,” said a Treasury official.
Rishi Sunak also announced further training and apprenticeship schemes providing businesses with grants from £1,000 to £2,000 per trainee.
It is hoped these measures will encourage businesses to retain current employees, bring in additional employees, while investing in new talent at no cost to the business, and even give back to communities by training young people who need a push up the career ladder.
Stamp Duty holiday and grants for green home improvements
House sales essentially ground to a halt during lockdown, with The Guardian reporting that almost 400,000 sales were put on hold after lockdown was introduced.
To support the housing market through this difficult period, the Chancellor announced a Stamp Duty holiday on the purchase of homes in England and Northern Ireland worth up to £500,000. It is expected that almost nine out of ten people buying a main home will have no Stamp Duty to pay at all.
This table shows how much Stamp Duty you could save if you are buying a main residence in England and NI before 31st March 2021. Note that first-time buyers will save a little less as they are already exempt from Stamp Duty up to £300,000.
|Property value||Normal Stamp Duty payable||Stamp Duty payable before 31st March 2021||Savings|
The government have also announced grants to help homeowners and landlords improve the energy efficiency of their properties.
By signing up online to the Green Homes Grant, which launches in September, you will be able to apply to receive vouchers for home improvements designed to lower the carbon footprint of your house, while supporting local green jobs.
These vouchers will cover at least two-thirds of the cost of the improvements, up to £5,000 per household, while low-income households will have their full costs covered, up to £10,000. The government estimates that you could save up to £300 a year in bills from the simple modifications the vouchers enable, such as added insulation.
VAT cuts and customer discounts for hospitality businesses
In response to the financial blow the hospitality and tourism industries have suffered due to Covid-19, VAT for businesses operating in these sectors has been cut from the current rate of 20% to only 5%.
This £4 billion catalyst for increased spending in these industries will be in place until 12th January 2021. From restaurants and hotels to cinemas and concert venues, businesses providing 2.4 million jobs will be supported through lowered operating costs to stay open and maintain job security for their staff.
While businesses are not obliged to lower their prices according to the savings made from this VAT cut, it is hoped that many will pass on these savings to customers by lowering prices of, for example, restaurant meals and cinema tickets.
In an additional boost to the hospitality sector, if you want to enjoy a day out after months in lockdown you will be able to take advantage of the new “eat out to help out” scheme.
Participating business can offer a 50% discount, worth up to £10 per person, for an unlimited number of eat-in meals ordered on a Monday, Tuesday, or Wednesday in August.
If you want to know more about how any of the Chancellor’s initiatives will affect you, please get in touch. Email email@example.com or call (0161) 8080200.