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An Overview of the Mini Budget

The government revealed it’s ‘Mini Budget’ on Wednesday 8th July which provided a number of stimulus measures aimed at restarting the economy and saving jobs in the wake of the Coronavirus outbreak.

The main points of the announcement were:

  •  New Temporary VAT rate of 5%

The chancellor announced a temporary reduction in VAT for the hospitality sector, reducing the current rate to just 5% for:

    • restaurants, cafes and pubs,
    • hotels, B&Bs, campsites
    • cinemas, theme parks and zoos

The 15% reduction in VAT for the period 15th July 2020 – 12th January 2021 covers the provision of food and drink, both eat-in and takeaway but explicitly excludes alcohol. Revised rates are expected for the Flat Rate Scheme, with additional guidance published in the coming days.

Businesses are invited to register for the scheme which offers a 50% discount on food and non-alcoholic drinks for diners, on Mondays, Tuesdays and Wednesdays during August 2020. Those businesses who sell food for consumption on site and were registered as a food business with their local authority before 7th July, can enrol in the scheme from 13th July 2020. Unfortunately food businesses who operate only take away services such as mobile food vans and catering service providers are explicitly excluded from the scheme.

  • Introduction of the Job Retention Bonus

The new Job Retention Bonus provides £1,000 to employers who bring back furloughed staff in November 2019, for at least three months on an average wage of £520

  • Introduction of the ‘Kickstart Scheme’

The Kickstart Scheme is aimed at creating new jobs for 16-24 years olds at risk of long term unemployment. The roles must be newly created, for a minimum of 25 hours of week and new employees should receive the National Minimum Wage. Additionally enrollees must receive training and support to assist in finding a permanent job with the government agreeing to pay the young persons wages for six months plus an additional amount to cover overheads. Applications from employers looking to offer the scheme will be welcomed from August

  • Incentive to take on New Trainees

Employers will receive £1,000 for every new trainee employed, with new places and additional funding of careers advice also announced

  • Incentive to take on Apprentices

A £2,000 bonus will be paid to businesses for each new young apprentice (16-24 years) they employ and and £1,500 for apprentices aged over 25

Rishi Sunak announced that the current threshold for Stamp Duty will increase to £500,000, reducing the cost of buying a home. Secondary or additional properties will still incur tax at the appropriate rate.

  • Introduction of the £2 billion Green Homes Grant

A new scheme which provides vouchers for homeowners and landlords to make their homes/properties more energy efficient. Grants will cover up to two thirds of the cost of improvements up to £5,000, and for low income households the full cost of improvements up to £10,000 will be funded.

Source: GOV.UK

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