The Coronavirus pandemic has adversely affected many people’s incomes, businesses, job prospects and investments. Although rumours leading up to the Chancellor of the Exchequer’s 2020 Summer budget mentioned a hike in taxes or eradication of some tax benefits to recoup government spending, the focus seems to be on rebuilding our economy.
Rishi Sunak’s summer statement aims to offset the economic damage forecast by the Bank of England and a 15% potential rise in unemployment. Included in the announcements were:
- reducing upfront costs when buying a house
- providing incentives for employers to take on new staff
- encouraging people to eat out to help support local establishments with the ‘Eat out to help out’ 50% discount food voucher.
The Furlough scheme will be wound down gradually from October. However, with a bonus system for employers retaining furloughed employees, taking on trainees or apprentices over age 25, and a government subsidy worth up to £6,500 for each employee taken on under Kickstart Scheme, there is clear incentive for companies to retain employees and expand their head count.
Companies need to apply for job subsidies within one month and the bonuses available differ depending on the scheme.
With a £3bn scheme to make buildings more environmentally friendly, a £2bn Green Homes Grant to make homes energy efficient and a £1bn budget to improve the energy efficiency of public buildings, the effects of Covid-19 on the housing and infrastructure industry is clearly a concern.
Property transactions fell by 50% in May. This is hardly surprising with house viewings being disallowed and chains from pre-lock down falling through as individuals worried about their financial situations. The housing market had started to pick up throughout June, however the intention to raise the Stamp duty threshold for six months from October, as originally planned, would have had a negative impact on the industry in the very near term. Rishi Sunak’s announcement to start this scheme immediately, and extend it for eight months (until 31st March) was therefore a relief.
With the threshold for the 2% rate of SDLT raised from £125,000 to £500,000 individuals will benefit from tax savings of £5,000 on house purchases of £250,000 and £10,000 on £500,000.
We would encourage everyone to call us on 01273 407500 or email on email@example.com to seek professional financial planning advice if, after reading this article, you are left with any concerns or questions.
Further articles relating to the impact of Covid-19 on workers can be found in the news section of our website and more indepth reading about the summer statement is available at: