The Chancellor, Rishi Sunak has had a busy few months since his appointment in February with the Spring Budget on 11 March 2020 and outlining the wide range of Government Covid-19 economic supports. This afternoon, he announced a ‘mini-budget’ which, as expected, focused on a package of short-term measures to combat the ongoing economic impact of Covid-19.
As part of the Government’s three-step recovery plan for jobs, the Chancellor also confirmed that there would be no extension to the Coronavirus Job Retention Scheme and that it would continue to remain flexible until 31 October 2020. However, in order to encourage employers to return employees from furlough there will be a new Coronavirus Job Retention Scheme bonus. Employers will receive a one-off bonus of £1,000 (paid in February 2021) for each furloughed employee who has been paid on average over £520 per month between the end of Coronavirus Job Retention Scheme and 31 January 2021.
There were a number of schemes launched to assist employers with the cost of hiring new staff, trainees and apprentices in England.
Secondly, to assist the Hospitality and Tourism industry, there will be a temporary six-month reduction in VAT from 20% to 5%, beginning next Wednesday 15 July 2020 (ending 12 January 2021). The new temporary rate will apply to food and non-alcoholic drinks from restaurants, pubs, bars, cafés and similar premises. It will also extend to include accommodation and admission to attractions during this period too.
In a further support to this industry, a new ‘Eat Out to Help Out’ scheme will be available during the month of August 2020, to encourage people to eat out between Monday and Wednesday. This will entitle every diner to a 50% discount of up to £10 per head on their meal, at any participating restaurant, café, pub or other eligible food service establishment. The discount can be used unlimited times and will be valid on any eat-in meal (including on non-alcoholic drinks). Local businesses can register to become participating establishments and make a weekly claim for reimbursement, which will then be paid within five working days.
Finally, there was some relief for the residential property market with a temporary increase in the Stamp Duty Land Tax threshold from £125,000 to £500,000 until 31 March 2021.
These latest measures are a very welcome boost to the local economy, however we must wait for the Autumn Budget and Spending review later in the year to understand the plan for longer term recovery.