UK Summer Economic Update - UNW's summary of the key announcements
Published on July 09, 2020
We are in exceptional times, so Chancellor Rishi Sunak presented the first ever “Summer Economic Update” on Wednesday 8th July against a backdrop of enormous economic uncertainty caused by coronavirus (COVID-19), and the resulting lockdown and mitigation measures.
Our summary of the Summer Economic Update provides an overview of the key announcements arising from the Chancellor’s speech, which are intended to support, create and protect jobs. Measures include a new Job Retention Bonus to support the phasing out of the Coronavirus Job Retention Scheme (CJRS), measures to boost construction, and an “Eat Out to Help Out” scheme to encourage people to return to eating out in August.
As the name suggests, the focus was very much on measures to try to stimulate and support the economy (in particular in relation to jobs), rather than tax, though these measures include a VAT reduction for businesses in the hospitality and tourism sector, and a temporary increase to the nil-rate band of residential Stamp Duty Land Tax (SDLT).
We have also included a summary of other recently announced measures: CJRS Phase 2, the Self-employment Income Support Scheme, and Support for cultural, arts and heritage institutions.
Our summary also includes a number of comments to help you assess the effect that the proposed changes may have.
As usual there will be a Budget in the Autumn, which will no doubt include further stimulus measures, indeed the Chancellor described the yesterday’s announcements as being the “second phase” of the economic response which is focussed on jobs and that a third phase which will come will be about re-building (he said the first phase was about protection).
The Autumn Budget would usually announce any tax changes and whilst it seems likely that tax rises will be required to begin paying for the economic support, it will be interesting to see whether that issue is deferred for the time being. As the Transition Period has not been extended, the UK’s departure from EU’s single market on 31 December 2020 will then be much closer and we should have a better idea of what (if any) trading deal will be agreed.
A summary of the Summer Economic Update is now available via the link below. We hope the document provides a valuable guide to the significant announcements.
If you have any questions regarding the information covered in this summary, or would like advice on a particular area, please get in touch with either your usual contact or any of the UNW Tax partners. Contact details can be found on the final page of this summary PDF.Download Summer Economic Update 2020