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Key Points to Take Away from the Summer Economic Update

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Chancellor Rishi Sunak has delivered the Government’s Summer Statement, a plan which has been produced to support the economy as it recovers from the impact of COVID-19. The focus of the intended measures will be a “Plan for Jobs”, encompassing the support, creation and protection of employment. In this blog post, MCC, a leading accounting firm in Manchester, provide an overview of the key takeaways.

Supporting Jobs

The Kickstart Scheme

From next month, employers are encouraged to sign up for the £2 billion “kickstart Scheme”, a programme which is designed to create new jobs for young people (aged 16-24) who are at risk of long-term unemployment. The Government will pay their wages and an amount to cover overhead costs for six months if employers meet certain conditions, namely proving that these jobs are additional, as well as providing workers with training and support. These jobs will encompass a minimum of 25 hours per week and will pay at least the national minimum wage. In addition, the Government will provide employers with £1000 for each new trainee they take on, and employers that offer apprenticeships will receive a payment of £2000 for each young apprentice, as well as £1500 for apprentices aged 25 and over. 

Creating Jobs

Stamp Duty Holiday

The Nil Rate Band of Residential SDLT (Stamp Duty) threshold will temporarily be increased from £125.000 to £500.000 until March 31st next year in order to boost people’s confidence in buying, selling and renovating homes and thus, support jobs across the property and house building sectors. This means that 9 out of 10 homebuyers will pay no stamp duty at all during this period.

Environmental Measures – Infrastructure and Decarbonisation

£8.8 billion will be invested in new infrastructure, decarbonisation and maintenance projects. The Government intends to grant £1 billion to make public sector buildings like hospitals and schools more energy efficient. In addition, £50 million will be granted towards the decarbonisation of social housing, which is expected to make over 650.000 homes more energy-efficient, saving money for tenants and cutting carbon emissions. Not only consumers, but also around 140.000 individuals in ‘green’ jobs would benefit from these measures. From September, landlords and homeowners will have the opportunity to apply for vouchers from a £2 billion Green Homes Grant Scheme in order to increase the energy efficiency of their homes and create local jobs for tradespeople. Such a grant will cover at least two thirds of the cost (up to a maximum of £5000 per household), and for lower-income households, the full cost will be covered (up to a maximum of £10.000 per household)

Protecting Jobs

The Furlough Scheme

The Furlough Scheme will be extended until the end of October. From August onwards, employers will be incentivised to bring employees back at least part-time, by receiving a £1000 “job retention bonus” for each furloughed employee earning over £520 a month that has been retained by the end of January next year. This could result in a maximum of £9 billion being paid by the Government in order to keep people in work.

Hospitality and Tourism

The Hospitality and Tourism sector has been hit particularly hard, with over 1.4 million people furloughed. The Government is planning to implement two measures to restart these sectors: the VAT on food, accommodation and attractions will be cut from 20% down to 5% for the next six months until January 12th, which will benefit over 150.000 businesses and consumers and help to protect 2.4 million jobs. The second measure announced is “the first of its kind Government-backed discount for all”: From August, everyone having a meal at a participating business will be able to receive a 50% discount (£10 maximum per person) from Mondays to Wednesdays. Businesses that wish to partake will be able to register from July 13th and claim the money back within five working days. 

Further Information

If you have any queries about the changes being implemented by the Government, or would like to find out how you’ll be affected, please contact the team at MCC Accountants on 0161 707 1500.