Chancellor’s Summer Statement

Reacting to the Chancellor’s Summer Statement this afternoon, Derry Chamber Chief Executive Paul Clancy said:

 “This afternoon’s Summer Statement from the Chancellor provides some clarity over the next steps in the recovery of our economy post-coronavirus. A six-month cut in VAT from 20% to 5% will be a huge boost for our badly-hit hospitality and tourism businesses and the ‘Eat Out to Help Out’ voucher scheme will hopefully encourage customers back into our world-class restaurants and cafes. However, going forward, the Chancellor must consider permanently reducing the VAT rate for hospitality and tourism businesses as bars and restaurants in Northern Ireland, and particularly in the North West, are at a competitive disadvantage to their Republic of Ireland counterparts who are subject to a much lower VAT burden. The North West has a strong and growing tourism offer and these are significant and welcome support schemes which will help our bars, restaurants, hotels, and attractions get back on their feet.

 “The Chancellor also provided further clarity on the future of the Job Retention Scheme. The new £1000 bonus for employers who bring back furloughed staff and retain them into 2021 is a welcome initiative which is designed to avoid large-scale redundancies, lay-offs, and unemployment. As a region which has historically had higher levels of unemployment, this new initiative will help the North West and businesses here to retain workers.

 “As the furlough scheme is gradually wound down, more financial support will be needed to protect jobs and businesses and I hope any fresh funding which comes to the NI Executive as a result of today’s statement is aimed at protecting jobs, enhancing skills, and rebuilding our regional economy.”

More details on  the Chancellor’s statement from HMRC as below:

Today the Chancellor announced the introduction of the Job Retention Bonus.

This is a one-off payment of £1,000 to employers that have used the Coronavirus Job Retention Scheme (CJRS) for each furloughed employee who remains continuously employed until 31‌‌‌ ‌January 2021. The bonus will provide additional support to retain employees.

To be eligible, employees will need to:

• earn at least £520 per month (above the Lower Earnings Limit) on average for November, December and January
• have been furloughed by you at any point and legitimately claimed for under the Coronavirus Job Retention Scheme
• have been continuously employed by you up until at least 31‌‌‌ ‌January 2021.

Employers will be able to claim the bonus from February 2021 once accurate RTI data to 31‌‌‌ ‌January has been received. More information about this scheme will be available by 31‌‌‌ ‌July and full guidance will be published in the Autumn.

Other new measures announced

The Chancellor also announced other measures, including:

• the Eat Out to Help Out Scheme – during August, diners can get 50% off Monday to Wednesday on meals and non-alcoholic drinks, up to £10 per person, when eating at participating restaurants, bars, cafes and other establishments that have registered
• VAT reduction – from 15‌‌‌ ‌July until 12‌‌‌ ‌January 2021, the UK government will cut VAT from 20% to 5% on any eat-in or hot takeaway food and drinks from restaurants, cafes and pubs, excluding alcohol. This VAT reduction also applies to all holiday accommodation in hotels, B&Bs, campsites and caravan sites, as well as attractions like cinemas, theme parks and zoos
• an increase in the Stamp Duty Land Tax (SDLT) threshold in England and Northern Ireland – increasing the threshold under which no SDLT is paid on the purchase of a main home from £125,000 to £500,000, with immediate effect until 31‌‌‌ ‌March 2021.

For more information, search ‘plan for jobs’ on GOV‌‌‌.UK.