10 Jul Summer Statement 2020 Summary
On the 8th July 2020 Chancellor Rishi Sunak delivered his Summer Statement.
As expected, the statement concentrated on job retention following recovery from the COVID19 pandemic.
The statement can be summarised as follows:
Stamp Duty:
An immediate freeze on Stamp Duty up from £125,000 to £500,000 which will run to 31st March 2021.
Previously it was charged on properties costing £125,000 or more, except for first-time buyers, who paid nothing up to £300,000 and then a reduced rate up to £500,000. So, this will be a tax cut for first-time buyers looking for property over £300,000 and other buyers purchasing a property for anything over £125,000. The additional 3% stamp duty applied for people buying second homes still applies across all bands.
In England and Northern Ireland, it’s estimated that this change will mean that nearly 9 out of 10 people getting on, or moving up, the property ladder will pay no Stamp Duty at all. Such breaks in Stamp Duty have a proven track record of boosting the housing market, though it’s worth noting that first time buyers already pay nothing up to £300,000 and according to the Halifax the average house price they pay is just £231,455.
VAT:
VAT to reduce from 20% to 5% from 15th July to the 12th January 2021 in the tourism and hospitality sectors (including food, attractions and accommodation).
It’s estimated that this will save households around £160 per year on average and will help support over 2.4 million staff at over 150,000 businesses.
£2 billion Kickstart Scheme – New jobs for young people:
The scheme aims to create hundreds of thousands of new jobs for under-25s.
The plan will subsidise six-month work placements for 16- to 24-year-olds claiming Universal Credit and facing long-term unemployment.
Government funding would cover 100% of the minimum wage for 25 hours a week in the scheme that will be open to all employers across Great Britain, with employers able to top up wages.
Employment Support Schemes:
There will be a £1.6 billion investment in scaling up employment support schemes, training and apprenticeships in order to help people looking for a job. This will include £2,000 for each new apprentice a business hires under the age of 25.
This is in addition to the existing £1,000 payment the Government already provides for new 16-18-year-old apprentices, and those aged under 25 with an Education, Health and Care Plan.
£1,000 employer bonus for each member of furloughed staff brought back:
The government will pay a £1,000 bonus to businesses for each furloughed person brought back through to January 2021.
Infrastructure:
The Government plan to bring forward new infrastructure work in order to create jobs of which £5.8 billion will be spent on construction projects such as hospital, school and road upgrades and maintenance.
Green Homes Grant Scheme:
A £3 billion Green Homes Grant scheme to pay for improvements such as loft, wall and floor insulation, and is open to homeowners and landlords in England.
50% Meal Discounts:
The government will give everyone 50% off meals in participating restaurants during August 2020. The discount will go up to £10 per head for adults and children and apply Monday to Wednesday.