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Covid-19 Chancellor’s Summer Economic Update

Rishi Sunak described the "profound economic challenges" facing the UK as he delivered his summer statement, telling MPs he will "give everyone the opportunity of good and secure work". 

The Chancellor announced a “jobs retention bonus” of £1,000 per employee to encourage employers to keep on staff, before laying out plans to pay the wages of hundreds of thousands of young people as part of a three-point “kick-start scheme” to boost the coronavirus-crippled economy. I have detailed below some of the salient points covered by the Chancellor, and we are also producing a fully detailed summary which will be available to download as a PDF on our website tomorrow at www.moco.co.uk/press-releases/covid-19-updates however like all of the previous incentives, it is sometimes days or weeks later until the finer details are available.  

Job Retention Bonus 

The furlough scheme will end in October as Rishi Sunak says ‘it’s in no one’s long term interest to keep it forever’. Keeping jobs supported by government pay is also unsustainable so in order to offer employers an incentive to retain employees he announced the introduction of new Jobs Retention Bonus. There will be £1000 bonus reclaimable per employee brought back from Furlough if they are still employed by January 2021 on a minimum of £520 earnings. 

Kick start scheme to support jobs

There will be a new Kick Start scheme which will directly pay employers to create new jobs for 16-24 year olds in danger of long term unemployment. The government will pay the first six month’s salary plus an amount for overheads but these must be new jobs. There will be no cap on the number of places available. 

The government will also make payments of £1000 available for Traineeships. Traineeships consist of work experience placements, training (including English and Maths) and work preparation for 16-24-year-olds. 

The Government will also pay £2000 to employers to take on new trainees for apprenticeships. 

House building and property sales

To support the housing market, Stamp Duty will be cut from today with no stamp duty on houses worth up to £500,000 until the 31st of March 2021. 

Assistance for hospitality and tourism

Hospitality and tourism have been particularly hard hit during the coronavirus and to help the 2 million people working in this sector, there are two new measures to encourage people to go out and lend their support. 

VAT on food, accommodation and attractions will be reduced from 20% to 5% from next Wednesday the 15th July until 12th January 2021. The second measure is being described as ‘Eat Out to Help Out’. This is a completely new idea and aims to get customers back into restaurants and pubs. The government will give everyone an ‘Eat Out to Help Out’ 50% off meal deal in the form of vouchers which will provide up to a maximum £10 off per head on the cost of food and non-alcoholic drinks throughout August on Mondays, Tuesdays and Wednesdays. All businesses serving sit down meals will be able to register for the ‘Eat Out to Help Out’ scheme with reimbursement for discounts being paid into their bank accounts within 5 working days by the Government. 

Green home owners grant

£2 billion will cover up to 2/3rd of the cost up to £5,000 for home owners to make green improvements to their houses and make them more energy efficient. 

Please remember we are always available to offer help and guidance on any of the measures affecting your business. 

Disclaimer from Morris & Co 

Please note this is the guidance as we understand the legislation at the current time. As you will appreciate it is changing almost on a daily basis and we cannot be held responsible if advice and guidance changes or if our interpretation does not subsequently prove to be correct.