The Chancellor has today released details of the government’s plan to help rebuild the economy and to create and protect jobs. A brief summary of the measures announced are as follows:
A £1,000 bonus for employers for every employee that is brought back from furlough
The Chancellor announced that the government will pay £1,000 for each furloughed employee that an employer brings back to work. In order to qualify the employee must be continuously employed from November 2020 to January 2021. The employment must be ‘meaningful’ in order to qualify for the bonus so each employee must be paid at least £520 a month, on average, from November 2020 to January 2021 – the equivalent of the lower earnings limit for national insurance.
New Kickstart Scheme for young employees and bonuses for employers who hire apprentices
The Chancellor announced the Kickstart Scheme, to create new subsidised jobs for 16-24 year olds claiming universal credit. The scheme, expected to cost around £2bn, will pay the wages of 16-24 year-olds starting new jobs that provide training and support for six months. The scheme will cover 100% of the minimum wage for a maximum of 25 hours a week with firms able to top up wages.
An additional £1.6bn will also be invested into employment support schemes, training and apprenticeships to help people looking for work. Businesses will receive £2,000 for each new apprentice they hire under the age of 25, this is in addition to the £1,000 already available for apprentices aged between 16 and 18 years old and those aged under 25 with an education, health and care plan.
£5,000 green home grant for every household
Grants of up to £5,000 will be made available to cover two thirds of the cost of insulating private residences for all households. For low income households the grants will cover the full cost up to £10k. This will support around 140,000 green jobs and reduce carbon emissions.
Stamp Duty Land Tax holiday for residential property up to £500,000
With the recent fall in house prices and the sales of homes dropping by over 50% in May, as a way to boost the housing market, the Chancellor announced a temporary cut to stamp duty land tax for residential properties. The reduction will come in with immediate effect and will run until the 31st March 2021. From today there will be no stamp duty land tax to pay on residential property transactions in respect of the first £500k of the consideration.
Hospitality and Tourism
In an effort to kick start the hospitality and tourism sector, VAT for hospitality and tourism related activities will be cut for 6 months to 5%. This will take effect from Wednesday 15th July and will continue until January 12th 2021. It is anticipated that this will apply to hotels, campsites, holiday lets, B&B’s, restaurants, pubs, cafes, takeaways, cinemas, theme parks, zoos etc. Alcoholic drinks are not included.
In addition, throughout August a new “Eat Out to Help Out” discount will be introduced, this will give a 50% discount, capped at £10-per-head for every diner eating out from Monday to Wednesday in the month of August. To be eligible for this scheme businesses will need to register online from next Monday.
If you have any questions on any of the above please do not hesitate to contact your usual RPG contact.