Summer Economic Update
On 8 July Chancellor Rishi Sunak delivered a Summer Economic Update, which outlined measures designed to boost the UK economy following the coronavirus (COVID-19) lockdown.
A new Job Retention Bonus was announced, which will provide employers with a one-off £1,000 bonus for each furloughed employee who is still employed as of 31 January 2021. The government hopes the Job Retention Bonus will incentivise firms to retain furloughed workers rather than making redundancies.
VAT will be reduced from 20% to 5% for the next six months for businesses in the hospitality and tourism sector. The VAT reduction will take effect from 15 July, and will apply to eat-in or hot takeaway food from restaurants, accommodation, cinemas, theme parks and zoos.
The Chancellor also announced a temporary increase to the nil-rate band of residential Stamp Duty Land Tax (SDLT) from £125,000 to £500,000 until 31 March 2021. This takes effect immediately and will be in place until 31 March 2021. Please note this only applies in England and Northern Ireland.
Meanwhile, a new Eat Out to Help Out discount scheme will provide a 50% reduction for sit-down meals in cafes, restaurants and pubs across the UK from Monday to Wednesday every week throughout August 2020.
Announcing the measures in the Summer Economic Update, the Chancellor said: ‘Our plan has a clear goal: to protect, support and create jobs. It will give businesses the confidence to retain and hire. To create jobs in every part of our country. To give young people a better start. To give people everywhere the opportunity of a fresh start.’
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