CHANCELLOR Rishi Sunak today revealed his plans for the next stage of the UK’s economic recovery in a mini-Budget.
We explain how it’ll affect your finances, including everything from a stamp duty holiday to a VAT cut for the hospitality industry.
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Chancellor Rishi Sunak has today revealed his plans for the next stage of the UK’s economic recovery in a mini-BudgetCredit: AFP or licensors
It was a follow-up to Mr Sunak’s first Budget on March 11, although this isn’t the autumn Budget, which is still expected to take place later this year.
The Chancellor said today: “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.
“I will never accept unemployment as an unavoidable outcome.
“We haven’t done everything we have so far just to step back now and say, ‘job done’. In truth, the job has only just begun.”
Here are some of the announcements made by Rishi Sunak today
1. Stamp duty holiday
Homebuyers will benefit from a stamp duty tax break on property worth up to £500,000 from today, cutting stamp duty bills by an average of £4,500.
The holiday will last until March 31, 2021, and will apply to all residential purchasers, including first-time buyers, second-steppers and those who are looking to downsize.
The move will enable some homes at the lower end of the London housing market to become exempt from stamp duty but crucially it will apply to hundreds of thousands of properties in the crucial “Blue Wall” seats that handed Boris Johnson his huge election win last year.
Currently, homebuyers in England and Northern Ireland don’t pay any stamp duty on the first £125,000 of homes, they then pay 2 per cent on the value between £125,001 and £250,000, and 5 per cent on the next £675,000.
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The exception to this is first-time buyers purchasing homes worth up to £500,000, who don’t pay stamp duty on up to £300,000, and then pay 5 per cent on the portion from £300,001 to £500,000.
If a first-time buyer purchases a property for £500,000 ahead of March 31, they’ll save £10,000 in stamp duty costs following the change.
Buyers usually pay stamp duty to HMRC within 14 days of the property transaction going through.
2. Cheaper staycations, takeaways and meals out
Brits are expected to save £160 a year on staycations and meals out as VAT has been slashed as part of today’s mini-Budget.
VAT (value added tax) will be cut from 20 per cent to 5 per cent for businesses in the hospitality and tourism industry.
The tax cut, which will take force next Wednesday (July 15) and will remain in place until January 12, 2021.
It doesn’t apply to booze but it will apply to food and non-alcoholic drinks from restaurants, pubs, bars, cafés and other similar premises across the UK, as well as to accommodation and admission to attractions.
The tax-cut will apply to the below businesses.
- Cafes and pubs
- Accommodation in hotels
- Caravan sites
- Theme parks
The government hopes this will encourage people to take staycations in the UK and to spend cash on meals out and trips to the pub, which in turn will boost the economy and may mean struggling hospitality sectors can start taking back staff.
3. Restaurant and pub meals out slashed in half
Restaurant and pub bills will be slashed in half when you eat out as part of a new government scheme that aims to boost the struggling tourism industry and economy.
Brits who dine out Monday to Wednesday in August will only have to pay for 50 per cent of the tab, Mr Sunak has announced.
The government’s will cover the other half of the bill through the Eat Out to Help Out scheme, up to £10 per head, to boost the hospitality industry post-coronavirus lockdown.
The discount includes children’s meals too although it won’t cover any booze ordered to go with your food.
It will see an £80 bill for a family of four reduced to just £40.
4. ‘Kickstart’ jobs scheme for young people on Universal Credit
Under the initiative, the government will pay towards six months of wage costs for 16- to 24-year-olds on Universal Credit who are hired by employers.
It will cover 100 per cent of the minimum wage for a maximum of 25 hours a week with firms able to top up wages.
Mr Sunak explained this meant the grant would be around £6,500 for a 24-year-old, with no cap on the number of places.
The Chancellor hopes it will trigger a mass hiring spree by firms when it opens next month.
5. More Jobcentre roles and helping young people find jobs
In addition, Mr Sunak has announced one of the largest increases in front line Jobcentre staff today, doubling the number of work coaches to 27,000.
About 270,000 more young people are also set to benefit from jobs advice through a £32million investment in the National Careers Service.
It comes as experts predict youth unemployment will soar from 420,000 to over a million by the end of 2020 as a result of the crisis.
6. £1,000 bonus per furloughed worker back at work
Businesses who bring back furloughed staff to work will get a £1,000 bonus per employee from the government to help keep Brits in work.
To get the bonus, bosses must pay each worker £520 per month on average, and continuously employ them through to January.
The government was previously warned how unemployment will hit five million unless urgent steps are taken to help businesses survive.
7. Green grants for homeowners and landlords
Mr Sunak also revealed homeowners and landlords will be given £5,000 in energy saving vouchers from September to help them insulate homes.
The most vulnerable households will get up to £10,000 to help make their houses more environmentally friendly.
The Green Homes Grant scheme will be available to help hundreds of thousands of homeowners.
They will be able to spend the cash on loft, wall and floor insulation, eco-friendly boilers, heat pumps, double or triple-glazed windows, low-energy lighting and energy-efficient doors.
Under the scheme, the government will cover at least two thirds of the cost homeowners spend on green upgrades.
The government says it will provide extra work for plumbers, builders and tradesmen and help the Covid-hit economy recover.
8. £1,000 bonus for firms hiring trainees
Mr Sunak confirmed a £111million scheme pledge encouraging firms to take on trainees.
Under the initiative, firms in England will get a £1,000 bonus for every 18- to 24-year-old new trainee they take on from September.
As part of the initiative, which lasts from six weeks to six months, young people will receive maths, English and CV writing training as well as guidance about what to expect in the workplace.
The package – revealed by The Sun last week – is aimed at helping one of the age groups hardest hit by the lockdown.
9. £2,000 bonus for firms creating apprenticeships
In addition, Mr Sunak announced the government will pay businesses £2,000 to create new apprenticeships.
The Apprenticeship Levy already incentivises large firms to take on apprentices, but small firms will now also be given a cash bonus for taking them on.
The scheme to boost apprentice roles for young people is in addition to plans to get more firms to take on trainees.
Meanwhile, Brits hoping for some extra spending money will be disappointed to hear that a £500 shopping voucher scheme was never planned as part of today’s mini-Budget.