A Budget for Recovery
Yesterday afternoon a new series of budget measures were put forth in Parliament by the Chancellor in a bid to stimulate the UK economy following the slowdown in economic activity due to COVID-19.
Some of these measures are quite eye-catching to small businesses, so let us a take a brief look through what is being offered.
Jobs & Training
There will be a variety of incentives available to employers for both taking on new staff and retaining staff that have been furloughed. These include:
- A £2,000 grant for every apprentice hired under the age of 25, in addition to the £1,000 that is already offered under the existing apprenticeship scheme.£1,500 will be offered to take on apprentices over 25.
- A £1,000 job retention bonus for every furloughed worker that is brought back to work and remains employed until the end of January 2021. To qualify, the employee must earn an average of at least £520 per month through November, December and January and have remained continuously employed.
- A £1,000 bonus available to employers for each new trainee they take on, capped at 10 new trainees.
- A new ‘Kickstart Scheme’, that will see the government fund up to 25 hours of minimum-wage work a week for six months to employers who take on a 16-24-year-old that was previously claiming Universal Credit.
This wide package will be supported by a large investment in Job Centres to help potential applicants find new jobs and work placements.
VAT Rate Cut & Eat Out to Help Out
For business in the tourism and hospitality sectors, there are two new measures being introduced to help boost trade. The first of these is a temporary cut in the VAT rate on food, non-alcoholic beverages, accommodation and tourist attractions from the standard 20% to just 5%. This scheme will run from the 15th of July 2020 to the 12th of January 2021 and it is hoped will provide a cashflow boost for businesses in these sectors.
The second measure announced is a new scheme called ‘Eat Out to Help Out’. Aimed primarily at restaurants, the scheme will see a 50% discount offered throughout August 2020 of up to £10 per head from Mondays to Wednesday at businesses who sign up. This discount will be backed by the government and £500m has been put aside to support it.
There is to be a temporary increase in the Nil Rate Band of Residential Stamp Duty, from £125,000 to £500,000 until the 31st of March 2021, which the government intends to help boost the property market.
Infrastructure & Green Investments
A fund of £8.8 billion has been put aside to support infrastructure and upgrade projects in a bid to keep British people working. This includes some £100 million for upgrades to roads, over £2.5 billion to go towards upgrades of schools, hospitals and courts as well as a targeted £1 billion available to help boost local recovery in places of need.
Homeowners and landlords in England will also be eligible to apply for vouchers worth up to £5,000 from the new £2 billion ‘Green Homes Grant’ to help with installing green improvements such as loft & wall insulation. This scheme is planned to be available from September via an online application that is to be backed with a quote from a contractor for the work.
If there is anything in this unusual mid-year budget that you think would be of help to your business and that you would like to discuss further, please don’t hesitate to get in touch with us. In the meantime, you can read the governments general overview of the new budget here.