What were the key announcements from the Summer Economic Update?
9th July 2020
Yesterday, Chancellor Rishi Sunak delivered his Summer Economic Update and laid out the next steps in the roadmap to rebuilding the UK economy and spur job creation.
The key updates from the 'Plan for Jobs' package are:
Job Retention Bonus:
- To prevent unemployment, the Government is introducing the Job Retention Bonus. If employers bring workers back from furlough and continually employ them until January 2021, those employers will receive a £1000 bonus per employee. Payments will be made from February 2021.
- Further details on this scheme are expected to be released at the end of July.
- The £2bn Kickstart Scheme will pay employers to create new jobs for 16-24 year olds who are on Universal Credit and at the highest risk of long-term unemployment. Funding will cover 100% of the National Minimum Wage for six months, plus an amount to cover overheads, as long as these jobs are new and offer 25 hours per week of work.
Funding for career development, traineeships, and apprenticeships:
- Plans to triple the scale of traineeships, ensuring that more young people have access to high-quality training to gain the skills needed for future jobs.
- The government will provide an additional £32 million funding over the next 2 years for the National Careers Service so that 269,000 more people in England can receive personalised advice on training and work.
- A payment of £2,000 to employers for each new apprentice they hire aged under 25 or £1,500 for each new apprentice they hire aged 25 and over, between August 2020 and January 2021.
- Funding to expand sector-based work academies to provide vocational training and guaranteed interviews for more people.
Investment into a green recovery:
- £2 billion worth of grants to pay for green improvements such as loft, wall and floor insulation, saving households money and creating jobs for tradespeople. These grants will provide £2 for every £1 homeowners and landlords spend to make their homes more energy-efficient, up to £5,000 per household. For those on the lowest incomes, the scheme will fully fund energy efficiency measures of up to £10,000 per household.
- £1 billion programme to make public buildings, including schools and hospitals, greener.
VAT cut to 5% in the hospitality and tourism sector:
- The rate of VAT applied to most tourism and hospitality-related activities will also be cut from 20% to 5%.
- Further guidance will be published by HMRC in the coming days.
Stamp Duty threshold raised to £500,000:
- Effective immediately and in place until 31 March 2021, buyers will pay no Stamp Duty on the first £500k when they move home.
Eat out to Help out Scheme:
- To encourage people to safely return to eating out at restaurants the Eat Out to Help Out discount scheme will provide a 50% reduction for sit-down meals from Monday to Wednesday every week throughout August 2020.
If you have any questions about the new or existing government support measures, please don't hesitate to get in touch with our team on 01926 422292.