Last week, Rishi Sunak pledged to “protect, support and create jobs” and get pubs and restaurants “bustling again” as he unveiled his ‘mini-Budget’ to kick-start the economy’s recovery.
There were some key announcements as outlined here:
Mr Sunak has cut VAT rates to stimulate economic activity in the wake of the COVID-19 recession. VAT on food, non-alcoholic drinks, accommodation and certain attractions has been slashed from 20% to 5%.
Mr Sunak said: “This is a £4 billion catalyst for the hospitality and tourism sectors, benefiting over 150,000 businesses, and consumers everywhere – all helping to protect 2.4 million jobs.”
The reduction will apply from July 15 until 12 January 2021.
A reduction in VAT for the sectors might not cut the cost to the consumer as the money is more likely to be used to save ailing businesses
The Chancellor announced a ‘stamp duty holiday’ as part of the Government’s COVID-19 recovery plans.
Homebuyers will be temporarily exempt from paying SDLT for the first £500,000 of any property price, saving them an average of £4,500.
The increase in the threshold from £125,000 to £500,000 is effective immediately and will run until the end of March 2021. Those purchasing more expensive homes will also benefit from reduced costs.
This measure runs alongside the higher rate SDLT refund time limit having been extended.
The housing market has been extremely slow during lockdown, making it difficult for many to move house. This has caused a massive problem for people who are trying to replace their main home, as extra SDLT can be payable when the home isn’t sold within three years of the buyer moving into a new one.
Prior to the mini budget last week, HMRC had announced that they had extended the three year limit to allow for any delays caused by the coronavirus. This is extremely welcome but care does need to be taken to prove to HMRC that the delay was purely coronavirus-related for those who wish to make use of the extension.
The Chancellor will pay businesses a £1,000 job retention bonus for every furloughed worker that is brought back and employed until the end of January 2021.
To qualify for the grant, workers must have been continuously employed and earn an average of over £520 per month in November, December and January.
The bonus will be paid from February 2021 and is the same for each employee irrespective of the employee’s actual wages, when or for how long they were furloughed, or when they were brought back.
Small businesses in the hospitality and leisure sectors were pleased with the measures in the mini-budget of last week but support is needed in other sectors hit by the coronavirus downturn.
Many were surprised that there wasn’t more support for the UK’s struggling high street.
Much of the detail surrounding the announcements of last week are yet to come out and we will keep you updated. For advice email firstname.lastname@example.org and one of the team will get in touch.