Summer economic update 2020
The summer economic update had the feel of a mini-Budget, with the Chancellor announcing a number of new measures as part of his “plan for jobs”.
The £160 billion spent by the Treasury so far on Coronavirus-related measures has constituted the first “protection” phase of the government’s response to the virus. The Chancellor told us that we are now in the second phase, in which the government will focus on supporting people to find jobs and on giving businesses incentives to create and protect jobs. The third “rebuild” phase will follow.
The Chancellor confirmed that the furlough scheme will not be extended any further, but he did announce that employers will be able to claim a jobs retention bonus for previously furloughed employees that remain employed until 31 January 2021. A number of measures were announced to help 16 to 24 year olds find jobs, and the construction sector received much attention, with the main announcement being a SDLT holiday until 31 March 2021. Finally, a much trailed VAT reduction was announced, with VAT due to fall from 20% to 5% in key parts of the hospitality and tourism sector until January 2021.
Although this was not a Budget speech, the Chancellor committed up to £30 billion towards these announcements, and it is clear that he has not put away the Treasury chequebook yet.
To read more click here