The Chancellor’s statement – What was announced and how will it affect your business?

/ Business and Economy, Government, Stamp Duty, VAT

Author: Joshua Ejdelbaum

Tags: Budget, Government, VAT

Yesterday, 8th July Chancellor Rishi Sunak made several policy announcements as part of his efforts to assist the economy which has been hit by the Coronavirus outbreak. The announcement included the following measures:

  • Cut in VAT for the Hospitality Sector – VAT on food, accommodation and attractions will see a 15% reduction in VAT from 20% to 5% from next Wednesday. The cut will apply to food, non-alcoholic drinks, accommodation and admission to attractions across the UK.
  • Furlough Scheme Bonus – Firms will be paid a £1,000 bonus for every staff member who has been furloughed and is kept on in employment for a further three months once the scheme ends in October. In order for the business to get the bonus, the employee must be paid a minimum of £520 on average each month from November until the end of January. He confirmed that the scheme would not be extended beyond October.
  • Stamp Duty – A temporary stamp duty holiday was announced, exempting the first £500,000 of all property sales from the tax. The scheme is to be effective immediately, and will run until March 31st next year.
  • Eat Out to Help Out Discount – The Chancellor announced a discount to help reduce the cost of eating out in order to provide a stimulus to the restaurant industry. From next Monday, businesses can sign up to participate and meals will be discounted by 50%, up to £10 a head. It will run from Mondays to Wednesdays throughout August.
  • Youth Employment and Trainees – A £2.1bn kickstart scheme was announced to create more jobs for those aged between 16 and 24. The fund will be used to subsidise work placements for people in that age bracket on universal Credit who are at risk of long-term unemployment. The Government is also due to give a bonus to firms to take on new work experience place of £1,00 each.
  • Energy Vouchers – As part of a wider plan to cut emissions, £5,000 vouchers will be made available for energy saving home improvements.
  • The Arts – Sunak announced a £1.6bn package to provide assistance to the Arts sector.

If you want to know more about the measures announced, and how they may affect your business, speak to your local accountant.