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  • Summer Economic Statement Analysis
Article:

Summer Economic Statement Analysis

09 July 2020

On Wednesday 8 July, the Chancellor announced a set of measures that focused almost wholly on the protection, support and creation of jobs in the wake of the COVID-19 pandemic.

With confirmation that the Coronavirus Job Retention Scheme will end in October this year, he also outlined a number of tax cuts, grants and government funded vouchers aimed at supporting businesses in returning and retaining their workforces as the UK enters the second phase of recovery.

For Northern Ireland, whilst a number of the measures announced wiithin the Chancellor's statement will come into effect automatically, the additional funding of £155m, including £39m for economic recovery, will be decided by the NI Executive as to how best to utilise.

Commenting on the announcements, Maybeth Shaw, BDO NI Tax Partner said, 

"Rishi Sunak’s statement contains very welcome announcements for businesses, as they seek to recover from the impact of Covid-19 lockdown measures.

Mr Sunak’s focus as we enter the second phase of the Government’s response to the crisis was on employment, with new policies announced to reward and incentivise employers to support, create and protect jobs, including a £1,000 bonus for each employee brought back from furlough and retained from November to January. A new kickstart scheme to help young people beginning their careers alongside further support for apprenticeships and traineeships was also announced.

The announcement that the SDLT exemption for transactions under £125k to be temporarily increased to £500k from today, until 31 March 2021, will be welcomed by the property & constructions sectors, as will the £2bn green homes grant scheme.

For local hospitality & tourism, the temporary reduction in VAT from 20% to 5% on food, accommodation and attractions from next Wednesday (15th July) until 12th January, alongside the new “Eat out to Help out” discount scheme were the Chancellor’s additional measures to support the sector that has been hardest hit by the lockdown measures
."


Managing Partner, Brian Murphy also commented, 

"In the Economic Statement the Chancellor has once again stepped up to provide a major financial intervention for the economy. 

As we embark upon the road to recovery, the confidence of the nation is critical and in recent weeks, with the announcements of so many job losses, this confidence has undoubtedly taken a hit. The Chancellor's announcements will hopefully serve to limit the number of redundancies in the coming weeks and months, particularity in the hospitality sector.

The announced measures in conjunction with the already extensive support provided previously, will go a long way to bolster people's confidence and will give the economy the kick start that it so desperately needs."

 

Detailed analysis can be found below:

If you would like to talk through any element of the analysis with the BDO team, get in touch with your usual BDO contact today or log a query below.