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Summer economic statement by the Chancellor on 8th July 2020

Posted by Crunch on Jul 8th, 2020 | Running a business

Summer economic statement by the Chancellor on 8th July 2020 - image of a worker cleaning tables

The Chancellor delivered an economic statement on 8th July 2020 setting out measures to help the UK recover from the severe impact of the COVID-19 pandemic. The statement is in addition to the planned autumn budget.

The measures announced on 8th July were described as a ‘plan for jobs’ and included reductions in tax, additional grants for employers and measures targeted at the hospitality and tourism sector. The more significant announcements involved the following.

Re-employment of furloughed workers – Job Retention bonus of £1,000

UK employers will receive a one-off bonus of £1,000 for each furloughed employee who is still employed as of 31 January 2021. To get the bonus, employers must pay the affected employee at least £520 each month.

Kickstart scheme for employers of young people – grant funding

The government will pay young people’s wages for up to six months covering 100% of the National Minimum Wage for 25 hours a week. Employers will be able to top this wage up. The scheme is targeted at young people aged 16 years to 24 years of age.

Employers can apply for the scheme from August 2020 with young people entering employment by the autumn. The government said there is no cap on the number of places funded and could be worth up to £6.500 per young person.

New payment of £2,000 for employers of apprentices

The government will pay employers a new £2,000 payment to take on apprentices.

Stamp duty abolished on properties up to £500,000

To boost the housing sector, the government announced an immediate increase in the threshold to pay stamp duty. The threshold will increase from £125,000 to £500,000 until March 2021. The average stamp duty tax bill will fall by £4,500.

If you’re looking to move or need advice on a self-employed mortgage, speak to Crunch Mortgages our specialist brokers.

Reduction in VAT for the hospitality and tourism sector

From 15th July 2020 to 12th January 2021, a reduced (5%) rate of VAT will apply to supplies of food and non-alcoholic drinks from restaurants, pubs, bars, cafés, and similar premises across the UK.

From 15th July 2020 to 12th January 2021, a reduced (5%) rate of VAT will apply to supplies of accommodation and admission to attractions across the UK.

Further guidance on the scope of these reliefs will be published by HMRC in due course. Our article on VAT registration and reporting has a wealth of information about everything to do with VAT.

Eat Out to Help Out discount scheme in August 2020

An imaginative scheme involving a discount worth up to 50% to a maximum of £10 per head for people having sit-down meals in cafes, restaurants, and pubs across the UK August 2020 was announced. It is known as the ‘eat out to help out scheme’ and offers customers the discount when they eat out between Monday and Wednesday in August.

The latest on COVID-19

We’ve been following all the latest government announcements concerning the coronavirus pandemic on our special COVID-19 Hub.

The Hub contains all of the government support available to small businesses and the self-employed community, as well as all of our articles and downloadable guides. We’d recommend bookmarking the Hub to keep track of all the latest news.

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