Your Mini Budget Summary

Focus on Job Retention

Rishi Sunak delivered a special summer economic statement to MPs yesterday, as he seeks to get the economy back on track after the lockdown prompted by the Coronavirus pandemic.

Announcing the ‘second phase’ of the Government’s plan he explained that this would focus on job retention, with a third phase to focus on rebuilding.

Here is a summary of the key measures he announced:

New ‘job retention bonus’ for employers

  • A new ‘job retention bonus’ will reward and incentivise employers who bring furloughed staff back to work
  • Employers will be paid £1000 bonus per furloughed employee they bring back and continuously employ through to the end of January 2021
  • To get the bonus, an employee must be paid at least £520 on average in each month from November to the end of January 2021
  • Bonuses will be paid in February 2021

New £2billion ‘kickstart scheme’ to help young people secure jobs

  • This scheme will subsidise six-month work placements for people on Universal Credit aged between 16 and 24, who are at risk of long-term unemployment
  • For each “kickstarter” job, the Government will cover the cost of 25 hours’ work a week at the National Minimum Wage – £4.55 for under 18s, £6.45 for 18 to 20-year-olds, and £8.20 for 21 to 24-year-olds
  • Employers will be able to top up that payment if they wish
  • In addition, the Chancellor announced that the Government would give companies £2000 each to encourage them to hire apprentices, and £1500 if they hire apprentices over 25
  • The scheme will open for applications in August

Stamp duty cut and grants for green home improvements

  • The stamp duty threshold is immediately rising to £500,000 for property purchases completed from 8th July 2020 until 31 March 2021. First time buyers who previously stood to incur stamp duty on purchases over £300,00 will benefit, as well as other buyers who previously incurred the tax on purchases over £125.000
  • This measure only applies to purchases of residential properties in England and Northern Ireland. At present, Scotland and Wales have not announced any changes
  • The ‘Additional Property’ 3% higher rate will continue to apply for second homes, buy-to-let and holiday home purchases
  • There will also be £2billion worth of grants made available for green home improvements. Homeowners will receive vouchers of up to £5,000 for energy-saving home improvements, with the poorest getting up to £10,000, for projects such as insulation. The Treasury claims this will protect more than 100,000 jobs and has been unveiled as part of a wider £3bn plan to cut emissions
  • The home improvements scheme will start in September

VAT cut and eating out discount to boost hospitality sector

  • A temporary VAT cut to help the hospitality and tourism sector, which has been hit hard in the pandemic, has been announced
  • VAT on food, accommodation and attractions will be reduced from 20% to 5% per cent from 15 July 2020 until 12 January 2021
  • The public will also be provided with an ‘Eat Out to Help Out’ discount. Mondays to Wednesdays in August, there will be 50% off bills in restaurants, up to a maximum discount of £10 per head for everyone, including children
  • The discount will be applied automatically when paying the bill, and the restaurant, cafe or pub will simply apply the reduction and then claim the cost back from the Government. Businesses will need to register through a website from next Monday to claim the money back, with the Government publishing a list of participating outlets on its website in due course
  • The discount does not apply to alcohol

Stay safe and well

The Clear Vision Team