Coronavirus pandemic has affected economies all over the world and UK is one of them. Many people have lost their jobs in this pandemic and the numbers are growing day by day. In order to recover from the economic impact, Chancellor Rishi Sunak announced an economic package of £30bn to help people save their jobs and created lot of new opportunities for the young individuals. He announced various measures in this summer budget to support and revive UK economy from the impact of COVID-19 and the following key decisions have been taken – Reduction in VAT rate for hospitality sector (Food, accommodation & attraction), Reduction in stamp duty land tax, Discount vouchers for food and subsistence (Cafes, pubs and restaurants), Job retention bonuses to employers etc.
UK government announced its 3 point plan and put emphasis on creating new jobs, providing support to people in finding new jobs and protecting the existing one.
KEY POINTS IN MINI BUDGET ANNOUNCED BY CHANCELLOR “RISHI SUNOK”
Stamp duty land tax relief– In order to capitalise the housing market and boost confidence in the first home buyers, UK government increased the SDLT threshold limit from £125,000 to £500,000 in England and Northern Ireland. Previously, home buyers are exempted to pay stamp duty on transactions below £125,000 but now the limit has been extended temporarily and they don’t have to pay tax for the first £500,000 on property price. This scheme is a big relief for the first time home buyers and can save their £4500 on an average. This scheme will remain until 31st March 2021.
Reduction in VAT– The another key decision taken by the UK government to protect 2.4 million jobs is of slashing down VAT rates from 20% to 5% for hospitality and leisure sector on food, non-alcoholic drinks, accommodation and tourist attractions. The main purpose of doing this is to benefit 150,000 businesses and consumers from this scheme for which the time period is only 6 months i.e. 15th July 2020 to 12th January 2021.
Discounted food– This is the most unique measure announced by the government which has not been tried in UK before. In this unique measure, every individual in Briton is entitled to receive 50% “eat out to help out” discount at participating businesses between Monday to Wednesday in the month of August. Businesses can easily register for this scheme online and will get a maximum discount of £10 per head for which the funds will be credited back to their accounts within 5 working days. This move by UK government will surely boost the hospitality sector & millions of workers out there. It will be valid at 129,000 restaurants, cafes and pubs across UK. The main purpose of creating this scheme is to encourage people to return safely to the eating joints such as cafes, pubs, restaurants and to protect 1.8 billion jobs across UK.
Coronavirus Job retention scheme– Chancellor Rishi Sunok announced £9 billion job retention bonus to reward those employers who will bring back their employees from furlough and continuously employee them until 31st January 2021. As per this scheme, UK government will reward employers and provide them a bonus of £1000 per employee. In order to get eligible for this bonus, employer needs to pay at least £520 per month on an average to their employees in the month of November, December and January. This was a previous scheme which was ending on October 2020 but it has now been extended by the government to save employees from the potential risk of losing their jobs.
Kick-start scheme– This scheme is basically announced for employers who will create new jobs for young people between age group of 16-24 years, will be offered 6 months wages plus amount for overheads by the UK government. In order to get eligible for this scheme, an employer needs to meet the following conditions –
- a. It must be a new job
- b. It should give entitlement to employee to receive at least a national minimum wage of 25 hours a week.
As per this scheme, the funds offered by the UK government will help in creating government standardised jobs for young unemployed persons for 6 months.
New Trainees– Around £111 million has been invested by the UK government for training courses and career advisors in order to employ new trainees and to improve their job skills. Businesses that are taking initiative to offer traineeships and employing more and more trainees will be offered a payment of £1000 per trainee by the UK government. This grant is offered so that every firm should hire at least 10 trainees. This grant is issued to the businesses to triple the number of traineeships so that more and more person will get employment as trainees and can improve their job skills.
Apprenticeship– As per UK government, businesses that will create new apprenticeship opportunities will be offered a grant of £2000 per apprentice below 25 years of age whereas for every new apprentice hired above 25 years of age, bonus of £1500 is provided.
Green jobs– A package of £3 billion has been announced for green investment by Chancellor Rishi Sunak in order to create thousands of new jobs. Amount of £1 billion has been set aside by the government to help make public sector buildings greener. In order to upgrade every household, to make it more energy efficient and to create more jobs, vouchers of maximum £5000 will be issued whereas for low income individuals, the maximum vouchers issued will be £10000. With the use of these vouchers, you can easily make upgradations such as loft and wall insulation. Treasury also expects that this measure will create more than 100,000 green jobs in UK.
In order to create more 5000 jobs at environmental charities and public authorities, £40 million will be allocated to green jobs challenge fund. Some of the funding amount that set aside are as follows –
- a. £100million funding allocated to technology taking carbon dioxide out of air named “direct air capture”.
- b. Extra £10million allocated to new electric car development projects.
Also See: How to claim VAT on mileage expenses?
If we will analyse the measures announced by the UK government in order to revive the economy from the impact of COVID-19, it is quite impressive. The mini budget announced has many great benefits - It not only gives protection to the existing jobs but also create new opportunities for the Young individuals. It seems like this mini budget is prepared for supporting the unemployed and saving the jobs of people who are at potential risks of losing their jobs. After announcements of these measures by Chancellor Rishi Sunok, it has been cleared that UK government is trying everything they can do to save existing jobs and providing new employment opportunities too.
We have seen what UK government has done for us, now its our turn to come forward and become a part of these great incentives and schemes and take a pledge to protect, support and create jobs.
Also See: COVID-19 Mortgage Payment Holiday
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