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The Chancellor Rishi Sunak’s mini-Budget: everything you need to know

Chancellor Rishi Sunak has unveiled his summer economic update in a bid to mitigate the impact of the Covid19 pandemic, with the aim of boosting job creation through a government ‘plan for jobs’ and encouraging consumer spending

Coronavirus job retention bonus

To reward and motivate employers to bring back employees, any employer who brings back a furloughed member of staff through to January 2021 will receive a £1,000 bonus per employee. this is conditional on the employee being paid at least £520 per month in November and December, equivalent to the lower earnings limit for National Insurance contributions.

The Chancellor confirmed that the coronavirus job retention scheme will be flexibly and gradually wound down through October.

Kickstart scheme

Rishi Sunak announced the Kickstart scheme for employers who create new jobs for any 16-24 year old at risk of unemployment.

The government will pay young people’s wages for six months, plus an amount for overheads, which will give employers a grant of around £6,500 for each employee taken on.  The funding is conditional on these being new jobs, paid at national minimum wage and for at least 25 hours a week.

Employers will be able to apply from next month, with the first Kickstarters in jobs in the autumn. The scheme is worth £2bn with no cap on the number of places available.

For the first time ever, the government will pay employers £1,000 to take on new trainees, with the aim of tripling the number of level 2 and level 3 courses, at a cost of £100m.

There is also extra funding for careers advice, and a tripling of the number of places in sector-based work academies.

In addition, over the next six months the government will pay employers to create new apprenticeships, with a grant of £2,000 per apprentice hired. There is a new bonus payment of £1,500 for hiring those aged over 25.

The government is also providing £1bn to the Department for Work and Pensions, to fund additional support to help those on universal credit get back into work.

Green jobs – Green Home Grant

To support a green-led recovery, Rishi Sunak announced a £2bn green home grant. Homeowners and landlords will be able to apply for vouchers from September to make housing more energy efficient and to create local jobs.

The government will cover two thirds of the cost up to £5,000 per household, and up to £10,000 for those on low incomes.

There is also £1bn of funding for developing energy efficiency in public sector building.

Stamp duty cut

The Chancellor pointed out that property transactions fell 50% in May, while house prices fell for the first time in eight years.

Presently there is no stamp duty on transactions below £125k (or £300k for first-time buyers). In a bid to rally the housing market, the Chancellor announced a cut in stamp duty, increasing the threshold for payment from the current £125,000 to £500,000. This is a temporary cut until 31 March 2021 and will take effect immediately.

VAT cut to 5% for hospitality sector

The Chancellor announced two measures. Firstly, there is a VAT cut from 15 July 2020 to 12 January 2021, reducing the rate from 20% to 5% for six months – this will see the VAT cut applied to food, accommodation, eat in or hot takeaways, cinemas, zoos and theme parks.

Secondly, Sunak unveiled a final measure and a first for the UK. ‘To get customers back into restaurants, cafes, and pubs and to protect the jobs of workers, for the month of August, we will give everyone an “eat out to help out” discount,’ Sunak explained.

This discount will apply to meals eaten at any participating business on Monday to Wednesday and will be 50% off to a maximum of £10 per head. Business registration for the scheme will be online via a government website – funds claimed back will be paid within five working days.

HB Accountants would like to thank the Accountancy Daily for information used within this blog – the original blog piece can be found here

HB Accountants are accountants for business. For financial and accounting guidance and support, please contact Keith or Karen. We’re still working hard to help you make the right decisions.

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The information contained above is for general guidance purposes only. Whilst every effort has been made to ensure the contents are accurate, please note that each individual has different circumstances and it is essential that you seek appropriate professional advice before you act on any of the information contained herein. HB Accountants can accept no liability for any errors or omission or for any person acting on or refraining from acting on the information provided in the above

1 thought on “The Chancellor Rishi Sunak’s mini-Budget: everything you need to know

  1. Pingback: If you are worried you have claimed too much or too little from the Coronavirus Job Retention Scheme - HB Accountants

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