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Summer Statement 2020: How Will The Announcements Affect You?
Rishi Sunak delivered the government’s Summer Statement on 8th July. Unsurprisingly, the announcements revolved mostly around the UK’s plans for economic recovery from the ongoing pandemic.
Many of these measures will affect small businesses, limited companies and the self-employed, so it pays to be aware of them. Here, we detail the key announcements that the Chancellor made, and what exactly they mean for you.
Cut to Stamp Duty Land Tax
Those who buy residential property between 8th July 2020 and 31st March 2021, in either England or Northern Ireland, will unlikely have to pay Stamp Duty Land Tax (SDLT). The threshold has temporarily risen from £125,000 to £500,000, making approximately 90% of expected new transactions tax-free.
For first-time buyers, this SDLT holiday effectively replaces the relief they’d normally get on purchases under £300,000. Landlords and second home buyers, however, whilst still eligible for the tax cut, will have to pay an additional 3% in SDLT on top of the new rates for any properties worth over £40,000.
Reduction in VAT
Another one of the main announcements specifically impacts restaurants, pubs, cafés, takeaways, hotels and B&Bs. The government revealed that their VAT will be reduced from 20% to 5%, starting on 15th July 2020. They plan to cease this on 12th January 2021.
For hotels and B&Bs, the VAT cut applies to accommodation. For attractions like theme parks, cinemas and zoos, it applies to admission. And for eateries, cafés and pubs, it only covers food and non-alcoholic beverages.
Introduction of a job retention bonus
As the financial support offered through the furloughing scheme will come to an end in October 2020, the government is instead promoting job retention through a new bonus. Employers will be given this £1,000 payment for each furloughed employee that is brought back into work and stays at least until the end of January 2021.
For businesses to meet the criteria for the bonus, their employee will need to be earning at least £520 per month.
Get accounts support with Bright Ideas Accountancy
Whether the Summer Statement announcements impact you or not, dealing with your tax and accounting matters during these unprecedented circumstances might still be a strain. Crunching the numbers and ensuring compliance with ever-changing legislation is not most people’s forte at the best of times – let alone during a period of great uncertainty.
Bright Ideas Accountancy can take this task off your hands, so you can focus on what matters to you. Whether you need help with VAT returns, support with bookkeeping, or financial planning assistance, we’re here for you.
You can get in touch with our supportive team today by calling us on 0161 669 4221, emailing info@biaccountancy.com, or filling in our online contact form.