Summer Statement 2020
Written by Ray Coman
As Britain emerges from lockdown, Rishi Sunback announces dramatic tax cut and fiscal stimulus measures to kickstart the economy.
The Stamp Duty Land Tax threshold will be temporarily increased with effect from today and until 31 March 2021. The value at which residential property is taxed will be rise from £125,000 to £500,000 during this holiday period. This was an attempt to address the reported 50% slump in house transfers throughout May.
Starting in September landlords and homeowners will be able to apply for a grant to make their homes more energy efficient. The grant will be used to cover two thirds of the cost of works up to £5,000 per household. Certain low-income households will obtain a higher grant of the full cost up to £10,000. The funds can be used on insulation, double glazing, energy efficient doors and the like.
The government put in place an incentive for employers to retain staff after furlough ends. The Treasury will pay employers a £1,000 grant per employee who is still employed on 31 January 2021. It is a requirement that the employee has been earnings at least the monthly lower earnings limit of £550 on average between the end of the Coronavirus Job Retention Scheme (30 November 2020) and 31 January 2021.
Throughout August 2020, every Monday, Tuesday and Wednesday, the government is offering an incentive for people to eat out. Restaurants will be able to obtain a subsidy for 50% of food costs capped at £10 per person. Participating diners in the UK can obtain the grant for eat-in meals and non-alcoholic drinks. The claim is made weekly and paid within five days.
The rate of VAT within the hospitality sector will reduce from 20% to just 5%. Lower rates will apply to food and non-alcoholic drinks from eateries, accommodation from hotels and B&Bs and attractions such as zoos, theme parks and cinemas. The VAT cut will operate from Wednesday 15th July until 12th January 2021.
As a consequence of lockdown, long term unemployment is a higher risk for 16-24 year olds on Universal Credit. The government will therefore cover the cost of hiring individuals in this group for up to six months. The subsidy is up to the national minimum wage for the first 25 hours per week and any related national insurance on those wages.
In a related move, the government has pledged to subsidise the cost of training new employees. An employer will receive a grant for each new trainee hired between August and January. The grant is £2,000 per trainee aged between 16 and 24 and £1,500 per trainee aged over 25.