Rishi Sunak, the Chancellor of the Exchequer, presented his Summer Statement to Parliament on 9 July 2020. Its intention is to help the country recover from the ongoing Covid-19 emergency.
A number of clients working with SME Strategies are landlords (either holding freehold properties as individuals or through a company they control) and so may be particularly interested in the Chancellor’s temporary cut to stamp duty (SDLT). Some potential property investors may now wish to look more seriously at the opportunities for them whilst interest rates remain staggeringly low. Owners of rental properties who have got their rental tax affairs in order (perhaps with the Let Property Campaign) may now wish to give some thought to their wider tax planning going forward. Others yet to get their affairs in order might now be prompted to do so!
Like many tax announcements this stamp duty change has unexpected consequences. A first time buyer of a £250,000 home will not benefit from the changes as they previously had been given a cut to their SDLT. However, a new main home costing £250,000 will now save £2,500 in SDLT but a second home costing £500,000 will save a whopping £15,000 in SDLT.
The changes announced in the Summer Statement will therefore significantly benefit those further up the housing ladder and investors in freehold property. Landlords thinking of buying or selling properties in the next year may wish to use the window of the next eight months for transactions.
For business owners the job retention bonus may be relevant.
Do contact us for more information or to discuss how the temporary SDLT cut may be relevant to you.
Key parts of the Chancellor’s Statement:
‘Job retention bonus’ to encourage firms to retain furloughed staff
- A one-off £1,000 payment to employers for every furloughed employee retained to the end of January 2021.
Temporary VAT cut for restaurants, hotels and attractions
- VAT reduced to from 5% (from the 20% standard rate) from 13 July 2020 to 12 January 2021 for food and non-alcoholic drinks in restaurants, pubs etc (hot takeaway food is included), hotel accommodation and admission to attractions such as theme parks and cinemas.
Stamp duty (SDLT) cut and ‘green homes grant’
- The threshold for stamp duty (SDLT) on residential property in England and Northern Ireland will rise from £125,000 to £500,000 from 8 July 2020 until 31 March 2021.
- The 3% SDLT surcharge remains in place.
- Up to £5,000 per household for projects to make homes more energy efficient in England.
Discount on restaurant meals in August
- “Eat out to help out” scheme offering a 50% discount for everyone (including children) (up to £10 a head discount) from Monday to Wednesday during August at participating restaurants, pubs etc. (Food and soft drinks only – alcohol excluded).
Support for young workers
- A “Kickstart scheme” to pay for six-month work placements for 16 to 24-year-olds on universal credit. Payments cover national minimum wage for 25 hours per week, plus national insurance and pension contributions.
- £1,000 grant per trainee for employers who take on new trainees aged 16-24 in England.
- £2,000 grant for employers per apprentice under 25 hired, £1,500 for those over 25, for six months starting 1 August in England.
- Doubling the number of work coaches at Jobcentre Plus centres.
- Additional money for the Flexible Support Fund to provide help for jobseekers.
- Funding for studies for 18 to 19-year-olds in England unable to find work.
- Increase in the Work and Health Programme to provide additional support for unemployed people on benefits for more than three months.
- A job-finding support service for those out of work for less than three months.
- Funding for a National Careers Service to provide advice on work and training in England.
Infrastructure and decarbonisation
- £1bn of grants to public sector bodies to improve energy efficiency.
- A £50m grant to a social housing decarbonisation fund which supports energy efficiency of socially rented homes.
The Chancellor’s Summer Statement can be read in full here –