What The Summer Statement Means For Your Business
In today’s Summer Statement, Rishi Sunak announced a number of measures aimed at supporting the economy. In this article, our team of experts examine the key points and discuss the implications for you and your business.
Support for bringing back furloughed workers
The government has announced that employers bringing furloughed employees back to work will receive a £1,000 bonus. To be eligible, the employee must be paid at least £520 per month and be employed through to January 2021. Though it will not fully offset the cost of employing the worker, this cash bonus will at least reduce the costs of bringing a furloughed worker back to work.
Incentives to hire trainees, apprentices and young workers
Firstly, the government is providing financial support to companies taking on people aged 16-24 as trainees. Companies will be provided with £1,000 per employee for up to 10 employees, which must be spent directly or indirectly on training. As well as being valuable support for young employees, this is great news for cash-strapped companies who may currently be struggling to find the budget to train new staff.
The government also announced further subsidies for apprenticeships, of £1,500 for employees aged 16-24 and £2,000 for employees aged 25 and over. Apprenticeships are already an attractive and cost-effective way to hire and train new employees and will be even more so after the subsidy.
Finally, the Kickstart Scheme will subsidise six-month work placements for people under 25 on Universal Credit who are at risk of long term unemployment, presenting an attractive and socially responsible solution for businesses looking to hire short-term employees.
Green energy subsidies
The Government has announced a number of new measures to help homes and businesses become more energy efficient, including a £2bn Green Homes Grant under which homeowners and landlords will be able to apply for vouchers to make their homes more energy efficient. The grants will cover at least two thirds of the cost (up to £5,000 per household), with further support for low income households. Additionally, £1bn of funding has been earmarked to improve the energy efficiency of public sector buildings. This is excellent news for businesses in the construction sector, where experts predict it will create jobs, and has benefits as well as for consumers, who may realise long term energy bill savings from these improvements.
Temporary stamp duty cut
The government has announced a temporary holiday on stamp duty on the first £500,000 of all property sales in England and Northern Ireland, to run until 31 March 2021. The change will take place immediately and is welcome news to anybody looking to move to a new home or purchase an investment property. By injecting fresh energy into the housing market, this move is also likely to benefit existing investors and homeowners by supporting the value of their property.
Support for the hospitality sector
The hospitality sector has been particularly hard hit by COVID-19, with sales across the sector projected to be 56% lower than last year. The Summer Statement included specific measures to help the sector. Firstly, VAT will be cut from 20% to 5% on food, accommodation and attractions. This is effective from next Wednesday and will last until 12 January 2021.
Secondly, the government will provide a 50% discount, capped at £10 per head, for people eating out at participating restaurants from Monday to Wednesday in August. Both of these measures represent a valuable stimulus for this struggling sector.