What does the Chancellor’s mini-Budget mean for you?

The government has come up with a package of measures designed to help the country’s economic recovery. Here we examine how it might affect you.

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Chancellor Rishi Sunak has unveiled ambitious plans to kickstart the economy through his ‘A Plan for Jobs’ mini-Budget.

It is aimed at giving businesses the confidence to retain and hire staff, and workers the opportunities and skills they need to get better jobs.

It also sets out to boost the economy by cutting costs for homeowners and buyers and encouraging individuals to start spending on the high street.

Whether a consumer, homeowner, job hunter or employer, we’ve broken it down for you, below…

For everyone…

Eating out discount scheme

A new ‘Eat Out to Help Out’ discount scheme will provide a 50% reduction for sit-down meals in cafes, restaurants and pubs across the UK from Monday to Wednesday every week throughout August 2020.

This will entitle every diner to a 50% discount of up to £10 per head on their orders, at any participating restaurant, café or pub and can be used unlimited times.

Firms will be able to claim back the money and it will reach their accounts in no more than five working days.

Cut in VAT

The rate of Value Added Tax (VAT) applied on most tourism and hospitality-related activities will be cut from 20% to 5% until 12 January, 2021.

Included will be accommodations and attractions, plus food and non-alcoholic drink. Check with HMRC for the full list.

It is estimated this will save households around £160 per year on average and along with the ‘Eat Out to Help Out’ scheme will support over 2.4 million staff at over 150,000 businesses.

For home buyers and owners…

Vouchers to make your home greener

Homeowners and landlords in England will be able to apply for vouchers to make their properties more energy efficient and save on bills.

The scheme will pay up to two-thirds of costs up to £5,000 per household, with those on low incomes being able to claim for the full amount of the work up to £10,000.

It’s funded from a £2 billion Green Homes Grant scheme to pay for green improvements such as loft, wall and floor insulation.

Compare the cheapest deals to save on your energy costs today.

Stamp duty ‘holiday’

The threshold to which stamp duty kicks in has been raised with immediate effect from £125,000 to £500,000 until 31 March 2021.

It only applies in England and Northern Ireland and he government estimates that nearly nine out of every 10 people getting on or moving up the ladder will pay no stamp duty at all.

It is designed to help increase confidence with buyers, sellers and those prepared to invest in property. The stamp duty holiday does not apply in Scotland or Wales.

To learn more about stamp duty read MoneySuperMarket’s guide.

Stamp duty calculator

For job hunters…

‘Green’ jobs

A £3 billion green investment package will support around 140,000 green jobs to work on upgrading buildings and reducing emissions.

This is part of a larger £8.8 billion package set aside for new infrastructure, decarbonisation and maintenance projects.

In addition, a £1 billion programme will make public buildings – including schools and hospitals – greener, helping the country meet its ambitions of achieving Net Zero by 2050.

Find out more on renewable energy prices and suppliers with MoneySuperMarket’s guide.

Kickstart Scheme for young people

A new £2 billion scheme will create hundreds of thousands of fully subsidised jobs for young people across the country.

Those aged 16-24, claiming Universal Credit and at risk of long-term unemployment, will be eligible.

Funding available for each six-month job placement will cover 100% of the National Minimum Wage for 25 hours a week. Employers will be able to top this wage up.

Apprentices

Businesses will be handed £2,000 for each new apprentice they hire under the age of 25.

This is in addition to the existing £1,000 payment the government already provides for new 16-18-year-old apprentices and those aged under 25 with an Education, Health and Care Plan.

Other measures

  • Traineeships will be tripled in 2020-21 thanks to a £111 million investment.
  • Academy placements will also be tripled in 2021, with an extra £17 million of funding.
  • The number of work coaches will be doubled to 27,000 with a £900 million injection.
  • Careers advisors at the National Careers Service will be able to support over 250,000 more young people thanks to a £32 million investment.

For employers…

Job Retention Bonus

Employers in the UK will receive a one-off bonus of £1,000 for each furloughed employee who is still employed as of 31 January 2021.

Employees must earn more than £520 per month on average and payments will be made from February 2021.

As the furlough scheme is wound down in October, it is aimed at trying to incentivise firms to retain staff and not make them redundant.

Further detail about the scheme will be announced by the end of July.

What next?

The next phase of the government’s plan will be set out in the autumn with measures to support the longer-term recovery through a Budget and a Spending Review.

These will detail further plans to invest in public service and to support innovation and infrastructure.

They also aim to seize global opportunities and to level up opportunity across every region and nation of the UK.

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