Summer Statement : Key Points

Published on Wednesday July 8, 2020

Summer Statement : Key Points

Chancellor Rishi Sunak has delivered his summer statement with an emphasis on jobs and the economic recovery. I will go through the main points raised; however, the detailed guidance hasn’t been published yet.

Summer Statement

Job Retention Bonus

Employers will receive a one-off payment for every employee who has been furloughed and who remains continuously employed until 31st January 2021. To be eligible, employees will need to fit in to the following criteria:-

1 – Earn at least above the lower earnings limit (£520 per month) on average for November, December and January.

2 – Have been furloughed at any point and legitimately claimed under the Coronavirus Job Retention Scheme.

3 – Be continuously employed up until at least 31st January 2021.

The claims will be available to apply for in February after accurate RTI’s have been submitted. More information will be available on 31st July and full guidance is expected in the Autumn.

VAT Reduction

There will be a 6 month VAT cut for restaurants, hotels and attractions down to 5% from 20%.

This will start on 15th July and last until 12th January 2021 and will be for all eat-in or hot takeaway food and drinks (excluding alcohol) from restaurants, cafes and pubs.

The VAT reduction will also apply to all holiday accommodation in hotels, B&B’s, campsites, caravan sites, theme parks, cinemas and zoos.

This will be one of the most difficult aspects from our side as we will need you to make sure your till reports split out alcohol from other wet sales. If you need help to get this sorted, please contact us as soon as possible.

Stamp Duty

There will be an increase in the SDLT (Stamp Duty Land Tax) threshold under which no SDLT is paid on the purchase of a main home from £125,000 to £500,000. This will take effect immediately and end on 31st March 2021.

The 3% levy paid for a second home still applies although you will still save as the thresholds have gone up.

Eat Out to Help Out

This scheme will offer a 50% discount for every diner, up to £10 per person on meals and non-alcoholic drinks at pubs, restaurants, cafes and other establishments that have registered.

The scheme is for the whole of August on Mondays, Tuesdays and Wednesdays.

Support for Young Workers

This kick-start scheme will pay for six-month work placements for 16 – 24 year olds on Universal Credit. The payments will cover 25 hours per week at national minimum wage plus national insurance and pension contributions.

There will also be a £1000 grant per trainee for employers who take on new trainees aged 16-24.

Apprentices

Employers who take on new apprentices aged under 25 will receive a grant for £2000 per apprentice. For those apprentices over 25, there will be a £1500 grant.

This will start in August and will last for 6 months.

Conclusions

All in all the announcements have been positive and welcomed, especially in an area that relies so heavily on tourism. I am sure there will be more announcements in the future as we all look to bounce back from this pandemic.

All the best
The DL Accounts Team

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