Many media outlets and pundits anticipated that the Chancellor’s Summer Economic Update would not contain major policy developments. Yet there was a range of announcements that will likely have important implications for the UK economy and household finances.
As such, the Update has been characterised as a “mini budget” covering areas such as VAT, restaurant discounts, employers and stamp duty. This article summarises some of the key highlights from this Update which affect you, below:
Furlough & bonuses
One significant policy announcement from the July mini budget is the government’s promise to pay employers £1,000 if they take furloughed workers back on. This is intended to incentivise organisations to keep people in work, and the scheme will run until January 2021.
Homebuyers
If you’re thinking about buying a new property in the coming months, then the Chancellor’s announcement about stamp duty is likely to catch your eye. From July 2020 until the 31st of March 2021, the new threshold will be £500,000 instead of £125,000. This could result in an average saving of over £4,000 and 9/10 buyers could end up paying no stamp duty at all.
Diners & publicans
A 50% “eat out to help out” discount has been offered by the government on meals in restaurants and pubs – up to £10 per head – to try and encourage the hospitality sector, which was hit particularly hard by the COVID-19 lockdown.
Those paying energy bills
A new green homes grant has been announced by the Chancellor, worth £2bn. This will allow homeowners and landlords to £5,000-worth of vouchers from September 2020 (£10,000 for low-income households), which should be spent on improving the energy efficiency of premises. This, in turn, is likely to lead to lower energy bills down the line.
VAT in certain areas
Those spending on leisure activities (e.g. hotels, cinemas and zoos) will see a 5% reduction in VAT until the 12th of January 2021. This will hopefully put more money in the pockets of ordinary people, and stimulate growth in the hospitality sector. However, other sectors such as hairdressing and beauty salons will not get the same benefit.