The UK government’s Chancellor Rishi Sunak announced on the 8th July a mini-budget aimed at minimising the economic impact in the wake of the coronavirus pandemic. With no announcements in relation to personal taxation, the government has instead turned its focus to putting in place measures to help stimulate the economy. These announcements included a stamp duty holiday, incentives to hire young talent and retain employees coming back from furlough, as well as initiatives to help the hospitality and tourism sectors.
We have included a quick summary of the key points below, however if you would like to speak to one of our Wealth Planners about how this might affect your personal circumstances, you can book a convenient time below, or alternatively you can email us instead.
Stamp Duty Holiday
Effective immediately and running until the end of March 2021, a home buyer in England won’t have any stamp duty (transaction tax) to pay on the first £500,000 of any property. Designed to stimulate transactions in the property market, this could save potential buyers as much as £15,000.
From Wednesday 15th July, VAT will be cut from 20% to 5% for certain goods and services in an aim to provide a much needed boost businesses in the hospitality and tourism industry. Pubs and Restaurants, as well as holiday accommodation and Cinemas all stand to benefit, although it is unlikely we’ll see a reduction in consumer prices, and instead see this used by businesses to bolster their finances.
Eat Out to Help Out
In a similar move designed to get people out eating in Restaurants and Pubs again, the Chancellor announced a reduction of up to £10 per head for those eating out Monday-Wednesday throughout August 2020.
Jobs, Training and Incentives
Job Retention Bonus Scheme: With the furlough scheme set to finish at the end of October, Mr Sunak announced a job retention ‘bonus’ scheme to replace it. The scheme will pay £1,000 to employers for each of their furloughed employees who remains in employment from November to the end of January 2021 and meet the minimum earnings of £520 per month.
Kickstart Scheme: Although already announced, the Chancellor’s plan to create more jobs for people under the age of 25 is worth £2.1bn. The scheme offers six-month work placements for those aged 16-25 on Universal Credit and are at risk of long-term unemployment.
Apprentice Schemes: The Government announced it will pay businesses up to £2,000 for every new apprentice it takes on under 25. For every new apprentice hired above the age of 25, they will pay £1,500.
What does this mean for you?
Whilst the Government has made it clear that this is the wrong time to be increasing taxes, it begs the question when will this time come? It seems inevitable that at some point in the future, the Government will have to find ways to pay for the pandemic. The Autumn Budget may become the right moment, but it will depend on how the Covid-19 crisis develops and what state the economy will be in at that point.
We live in uncertain times and you may have questions about how the mini Budget, the ongoing pandemic or potential future changes to legislation may affect your financial strategy. Whilst we cannot predict the future, we can certainly help you with the information, guidance and advice you need to develop a clear plan.
If you would like to discuss any of the above in relation to your personal financial situation, you can get in touch with one of our Wealth Planners via the link above. We’d be delighted to help.