Summer Statement key points

The chancellor yesterday made a summer statement to outline measures to continue to reinvigorate the economy after Covid-19 lockdown.

Job retention bonus

A new incentive has been announced for employers to retain previously furloughed employees  until at least the end of January 2021. The form is a one-off bonus of £1000 for each furloughed employee retained and that employee must earn over £520 per month. It seems that this aims to bridge the gap between the wind down of the furlough scheme at the end of October 2020 and January 2021.

Younger workers

New initiatives are introduced to support 16-24 year olds to train for and find employment. These include grants to employers to take on trainees, grants for employers to take on apprentices, providing more job coaches at Jobcentres Plus around Great Britain, job finding support for those out of work for more than 3 months and funds for further training of 18-19 year olds.

Stamp duty cut

Mr Sunak announced an immediate cut to stamp duty costs by raising the threshold of property transactions that come into stamp duty charge. Stamp duty will become payable on property transactions of over £500000 in value rather than the previous threshold of £125000. The cut runs from 8 July until 31 March 2021 and estate agents are already reporting that their phones are ringing non stop with new properties coming to the market. 

VAT reduction for restaurants, hotels and attractions

One of the hardest hit sectors has been granted a cut in VAT rate from 20% to 5%. It is hoped that this will help businesses to survive, re-establish and encourage job retention. The measure runs from 15 July 2020 to 12 January 2021 and although welcome, the nature of the mid- month changes will mean more administration time to split the figures into the correct percentages for the VAT returns.

Restaurant discount

A somewhat amusingly named ‘eat out to help out’ discount scheme will be in operation throughout August 2020 in participating restaurants, pubs and cafes. The discount offered will be 50% up to a maximum of £10 per head, including children. The slight snag of the discount is that it will only be available on Mondays to Wednesdays and with rumours circulating before the statement that each adult was to be offered a £500 high street voucher, this measure came as rather a disappointment.