On the 8 July 2020, Chancellor Rishi Sunak Chancellor delivered a summer statement, outlining his ambitions for a recovery from the economic harm done by the COVID-19 pandemic.
Here, expert lawyers from across our residential conveyancing, employment, corporate and commercial and commercial property teams offer their insight into the measures outlined.
Rebecca Swain, head of conveyancing, comments:
“We welcome the news that the Chancellor is backing the housing market to aid the country’s financial recovery. By temporarily increasing the threshold from £125,000 to £500,000, a large number of buyers will no longer face having to pay SDLT and others will make savings of thousands of pounds.
“The change comes in to immediate effect and will last until 31 March 2021. The result is that anyone buying their main home for less than £500,000 will no longer face having to pay any SDLT and those buying in excess of £500,000 will only pay SDLT on the price above that figure. The stimulus will benefit first time buyers, home-movers and most individual investors alike. Individual buyers of second or additional properties will still have to pay the 3% surcharge, but will also benefit from the first threshold being increased to £500,000 as only 3% SDLT will be payable up to that value.
“Following on from the early relaxation of lockdown for estate agents, valuers and surveyors, this reaffirms the Government’s commitment to do what it can to stop the housing market from stalling. We had not seen any sign of that happening, in fact quite the opposite, but this will be a welcome tax break that we expect many to take advantage of.
“Further details of the new rates applicable during this ‘holiday’ and a SDLT calculator can be found at: https://www.gov.uk/guidance/stamp-duty-land-tax-temporary-reduced-rates.”
Nick Hobden, head of employment, adds:
“Ever since the Chancellor Rishi Sunak announced the winding down of the much needed furlough - Coronavirus Job Retention Scheme (CJRS) at the end of October 2020, there have been many employers who have started redundancy processes already, for fear that they will not be able to afford all or most of their workforce costs from the end of October. Because the down turn in the economy is set to continue, all the while there are fears of a second spike in the pandemic.
“The announcements from the Chancellor are aimed at encouraging to employers to:
- Retain employed staff after 31 October and continuously employ them until at least 31 January 2021, for which they will get a £1,000 job retention grant per ex-furloughed staff member coming back to work from 1 November, provided those staff earn above the lower earnings limit (LEL) of £520per month;
- Continue to employ apprentices aged between 16-24 on high quality work placements for 6 months, for which the Government will, in return, fund £1,000 per trainee; and
- Take on new apprentices between 1 August and 31 January under aged 25, for which they will receive £2,000 per head from Government and for those taking on new apprentices over aged 25, over the same period, the subsidy will be £1,500 per apprentice.
“With a consumer led economic recovery the thinking behind this extra support, will this be enough to get the high street and hospitality sector kick started again? How much will the above act as incentives to employers to retain jobs and higher younger workers? It is difficult to tell with business confidence at a low level.”
Joanne Gallagher, head of corporate and commercial comments:
“Chancellor Rishi Sunak has unveiled a creative discount scheme, "eat out to help out" to run during the month of August.
“It is designed to help boost the hospitality sector, where diners will receive a 50% discount off their meal (up to a maximum of £10 per person) from participating restaurants, cafés, and pubs across the UK. The discount will not apply to alcohol, but to food and soft drinks, if people eat out in August between Monday to Wednesday.
“This combined with the reduction of VAT on hospitality and tourism to 5% from the previous 20%, for the next six months – should help kick start much needed activity in this embattled sector. We are sure our food and drink sector clients will see this as a welcome initiative.”
Caroline Cohen, associate in the commercial property team adds:
“The Chancellor has announced a new £2bn “green homes grant”.
“The intention behind the grant is two fold, to make homes more energy efficient in order to achieve long term targets to cut emissions and address climate change and to help support more than 100,000 jobs in this sector.
“Under the scheme the Government will pay two-third of the cost of works to residential properties that result in an energy saving, subject to a limit of £5,000 per household. The scheme would include works such as cavity wall insulation, loft insulation and double glazing. The scheme will launch in September 2020 and the Government will issue a voucher towards the cost of these works.
“The announcement also included £1bn towards improving energy efficiency in public sector buildings.
“Whilst this may be welcomed by most homeowners there are many asking why people renting have been left out, particularly given that the rental sector makes up 8.5 million homes and rental properties are amongst the worst performing in terms of energy efficient. Will this be enough for the UK to meet its 2050 target of achieving net zero carbon emissions without further investment?”