What will short-term reliefs mean long-term?
After weeks of lockdown and uncertainty, Chancellor Rishi Sunak delivered a mini-budget that coincided with the re-opening of many businesses and focused on jobs and confidence. PSG Wealth Management MD, Paul Gilsenan, examines the impacts.
With more businesses allowed to reopen for the first time in months, and with a decrease in government-backed furlough payments imminent, the focus for the Chancellor was to offer reassurance and assistance to those who have been badly financially impacted by the pandemic.
Dubbed a “plan for jobs”, the wide-ranging measures included VAT cuts, incentives and housing support. A £2 billion ‘kickstarter’ campaign (not the popular website!) to encourage firms to hire 16-24 year olds, alongside a £1,000 bonus to encourage firms to bring back furloughed staff sounds encouraging. Some firms however, struggling to decide whether re-opening is an option at all, may question if the measures go far enough.
The hospitality sector has been particularly hard hit by the impact of COVID-19, meaning they will undoubtedly welcome a cut in VAT from 20% to 5%, along with an incentive for people to visit restaurants. With social distancing measures in place, people will be able to enjoy half-price discounts on meals between Monday and Wednesdays, up to a tidal of £10 per head. While some may still be wary to venture into public spaces, discounts will almost certainly help boost bookings.
Moving to the housing market, Sunak announced that the stamp duty threshold for home purchases has now been lifted from £125,000 to £500,000 until March 31st next year. He also revealed that homeowners will receive vouchers to fund green projects such as insulation for homeowners.
Throughout the pandemic the Chancellor has sought to alleviate money worries for the public with unprecedented packages of support.
While these latest announcements will come as a relief to many, just as with previous announcements, it leaves others waiting to hear of their own support. This is still the case with live comedy venues which don’t currently qualify for the £1.5 billion emergency arts funding programme recently announced.
Autumn’s planned budget will no doubt contain further long-term plans for UK finances and many will be anticipating some difficult decisions to try and balance the current high levels of public debt.
Ending on a cautiously optimistic tone, the Chancellor said: “Although hardship lies ahead, no-one will be left behind.” Whether this is the case remains to be seen. The levels and bases of taxation, and reliefs from taxation, can change at any time and are generally dependent on individual circumstances.
This was posted in Bdaily's Members' News section by PSG Wealth Management Ltd .