Summer Statement 2020: what it means for you and your business
Covid-19 has had a huge impact on people’s health and well-being but it has also taken its toll on businesses. The words ‘unprecedented’, ‘new normal’ and ‘furlough’ are top contenders for the most used words of 2020 but the UK is starting to move again and with that, questions are being asked about ‘how’.
On Wednesday, Chancellor Rishi Sunak delivered a Summer Statement (or ‘mini budget’ as it’s also being called). The statement outlined his ambitions for the UK’s recovery from the recent economic harm.
There have been many questions around the statement and what it means for individuals as well as businesses, and many will be reading between the lines to try to understand how it can help them.
We’ve taken a look through the statement in detail and outlined the proposed measures and what they mean for employment, businesses and the housing market.
Employment
The Chancellor focused much of the Summer Statement on the safety and creation of jobs. He revealed a £9bn bonus scheme, rewarding employers who furloughed employees to bring them back once the job retention scheme ends in October. Companies will receive £1,000 per employee brought back from furlough, as long as they continue working until January. They must also be paid at least £520 on average per month from November to January, equivalent to the Lower Earnings Limit for National Insurance.
A ‘Kickstart Scheme’ of £2bn has also been announced to pay for six months’ worth of wages for organisations who create new jobs for young people. There will be a payment of £2,000 to firms that create new apprenticeships.
The bonus buys employers some time to make decisions. However, the question is whether it is enough to reconsider redundancies if that was to be the case, or if it will benefit only employers who were planning to bring staff back from the furlough scheme.
How our employment solicitors can help
If you are looking for support and advice, whether an employee or employer, our employment lawyers can help. Our specialist team provide businesses with employment support and advice as well as professional HR solutions. We also advise employees on matters such as redundancy, settlement agreements and workplace discrimination. For more information, call us on 0117 325 2929 or fill out our online enquiry form.
Businesses
The Jobs Retention Bonus will help struggling organisations from the employment side, but what about business recovery? With low cash flow and reduced need for some businesses, some organisations are asking about business relief rates and how else the government can help businesses to recover.
Hospitality industry
Unless an outlet could swiftly refocus or even re-purpose itself as a takeaway service, thousands of restaurants, pubs and cafes closed at the end of March. It’s not even the smaller independent high street cafes that have been hardest hit; some of our most well-known chains have suffered the brunt of the virus.
On 4th July, much of the hospitality industry reopened, albeit gingerly and with strict distancing and hygiene measures in place. However, we’d be naïve to think that a few weeks’ worth of excited customers can make up for months out of pocket. Rishi Sunak stated that he plans to cut the sales tax (VAT), normally included in the cost of food, accommodation and attractions from 20% to 5% until mid-January.
Alongside this, in his Summer Statement, the Chancellor also introduced the ‘Eat Out to Help Out’ initiative. It will give people 50% off their restaurant bill (up to £10 off per head between Mondays and Wednesdays during August) to bolster the hospitality sector.
The concern is that people remain hesitant about spending money and time away from home, even with this ‘discount’. And is a cut in VAT the answer to saving these establishments this many months on?
How our commercial law solicitors can help
Many other business industries and sectors are starting to reopen or looking at how they have weathered this storm. We have seen an increase recently of people wanting to exit a business and on the flip side, in people starting new ventures, having used the time at home over recent months to fast track those plans. Our Corporate and Commercial solicitors have the expertise to assist businesses put in place or review bespoke contracts or standard terms and conditions, as well as helping those wanting to exit their business through a sale.
Our commercial law solicitors are currently offering business owners an initial review of individual commercial contracts for a reduced fixed fee of £350 plus VAT. To take advantage of this offer or to discuss how we can best support your business needs, call us on 0117 325 2929 or fill out our online enquiry form.
Housing and property
Many UK residents were left in the lurch when estate agents closed their doors and suspended viewings in March. It’s been a nerve-wracking few months for house hunters and sellers. So now things are moving again, everyone is wondering whether the housing market will suffer the brunt of Covid-19’s effect on the economy.
Stamp duty
There’s good news for buyers in England and Northern Ireland as the threshold for paying stamp duty increases to £500,000. This is with immediate effect, until 31st March 2021. Stamp duty has, until now, been paid on land or property sold for £125,000+.
This will come as a huge relief to buyers and sellers over the coming months, whose jobs have been affected by the virus or who have simply struggled to buy or sell. Not only that, but it’s a huge boost for the housing market. A lower stamp duty threshold means an increase in people engaging with the property market.
When lockdown was eased and the housing market restarted, our conveyancers saw a spike in people eager to get moving. On the other hand, leading UK banks and mortgage providers, Nationwide and Halifax reported falls in the average value of UK homes in June.
Now the threshold for stamp duty has been lowered, conveyancers and estate agents alike could well see another boost as buyers and sellers re-evaluate what they can now afford.
Whether you’re looking to buy or sell, our specialist conveyancing solicitors in Bristol and South Gloucestershire are here to help. For a free quote, complete our short form or call us on 0117 325 2929.
Home improvements
In his statement, Rishi Sunak also unveiled plans for the government to pay at least two-thirds of the cost of home improvements that save energy. Starting in September, this will be paid as a voucher when the work is approved.
It’s not only home owners who benefit from this saving on the implementation of insulation or solar panels, for example. Landlords and tenants should reap the awards from lower energy bills as a result of more effective energy systems.
Further information
This Summer Statement has given us all a lot to digest. There will no doubt be many questions as to how it will all be implemented and managed. Our solicitors continue to monitor the situation closely and will update our coronavirus FAQs as and when we have further updates or clarification.
In the meantime, whether you’re seeking advice on a business or employment matter or you’re moving home, get in touch by calling 0117 325 2929 or fill out our online enquiry form.