DAMs key takeaways from the summer budget announcement
The Summer Budget statement is providing obvious welcome support to employers with a package of initiatives to help create and protect jobs.
With initial government funding of £2bn, one of the key initiative introduced is the Kickstart Scheme in Great Britain, designed to create hundreds of thousands of high quality 6-month work placements for those aged 16-24 who are on Universal Credit and are deemed to be at risk of long-term unemployment. Chancellor Sunak has confirmed that the funding will cover 100 per cent of the relevant National Minimum Wage for 25 hours a week, plus the associated employer National Insurance contributions and employer minimum automatic enrolment contributions (employees can also ask employer to join the pension even if not auto-enrolled automatically) .
Sunak has also announced a scheme offering a £1,000 cash ‘bonus’ for firms hiring young people into traineeship programmes from September.
Aegon pensions director Steven Cameron says: “It’s great to see the Chancellor again support automatic enrolment by allowing employers who take on new employees under the Kickstart scheme claim not just earnings costs but also their NI contributions and employer minimum a-e contributions. While it is only those aged 22 and over who an employer needs to auto-enrol, this is a great way of kickstarting not just employment but saving for retirement.”
In respect of Financial planning for individuals other key aspects from the summer budget include:
Temporary Stamp Duty Land Tax (SDLT) cut - The government will temporarily increase the Nil Rate Band of Residential SDLT, in England and Northern Ireland, from £125,000 to £500,000. This will apply from 8 July 2020 until 31 March 2021 and cut the tax due for everyone who would have paid SDLT. Government claim nearly nine out of ten people getting on or moving up the property ladder will pay no SDLT at all.
Sunak also slashed VAT on food, accommodation and attractions from 20 per cent to 5 per cent, a tax cut worth up to £4 billion. These temporary cuts could mean having some additional money (no matter how small) to put towards saving, whilst still being able to enjoy the new freedoms of being able to eat out and begin to socialise with family and friends again. Mr Sunak said VAT will be reduced from July 15 until January 12 to help. but importantly, does not include alcohol.
He also revealed an "eat out to help out" plan for dining out in August to boost the hospitality sector, with a 50 per cent discount per head from Monday to Wednesday up to a maximum discount of £10 per diner.