On July 8th, Chancellor Rishi Sunak announced a series of new measures worth £30bn in a bid to prevent mass unemployment as the economy is hit by the coronavirus pandemic.
The new package, unveiled in the chancellor’s “mini budget”, includes wage subsidies, tax breaks, consumer discounts and a “kickstart scheme” to create jobs for young people.
£1,000 bonus for firms after the furlough scheme
The government has pledged to pay a £1,000 bonus to firms for every employee they retain through to January following the end of the furlough scheme in October.
"It's vital people aren't just returning for the sake of it – they need to be doing decent work,” the chancellor said when explaining how the scheme will work.
"So for businesses to get the bonus, the employee must be paid at least £520 on average, in each month from November to the end of January – the equivalent of the lower earnings limit in National Insurance."
VAT reduction – from 20% to 5%
The chancellor also unveiled plans to reduce VAT on food, accommodation and attractions from 20% to 5%, starting on July 15th. The cut will apply to the following:
- Eat-in or hot takeaway food from restaurants, cafes and pubs
- Accommodation in hotels, B&Bs, campsites and caravan sites
- Attractions such as cinemas, theme parks and zoos
Specifics about how the £30bn package will be paid for (through borrowing and potential tax increases) will likely be revealed in the chancellor’s Autumn budget.
“Eat Out to Help Out” initiative
This feature is designed to safeguard 1.8 million jobs, according to the chancellor. Those dining out at participating restaurants from Mon-Wed will receive a 50% discount in August (capped at a £10 discount per head).
Registration for the scheme will open on July 13th.
Stamp duty holiday
A stamp duty holiday is being launched to help stimulate the property market. The first £500,000 of all property sales are currently exempt from tax.
“Kickstart Scheme” for young people
The government will subsidise six-month work placements for 16 to 24-year-olds who are on Universal Credit and at risk of long-term unemployment.
The £2bn scheme will launch in August and run until December 2021 with an option for extension. The government will cover the cost of 25 hours’ work per week at the National Minimum Wage and employers can top up workers’ pay.
Other measures announced in the lead up to the chancellor’s statement:
- Up to £5,000 vouchers for energy-saving home improvements
- 30,000 new traineeships for 16 to 24-year-olds in England
- £1.6bn package for the arts and heritage sector
- £32m for extra careers advisers, £17m for work academies in England and the doubling of Job Centre front line workers.
What funding is available to me?
To find out if you might be eligible for any of the government’s COVID-19 measures, you can visit the coronavirus section of the government’s website. If you run a business and are looking for funding, you can use our platform to find out what type of finance you might be able to apply for.