Despite having promised that nobody will be left without hope during COVID-19, in the Summer Statement the Chancellor overlooked millions of freelancers, contractors and self-employed workers in the £30bn worth of packages rolled out to get the economy up and running again.
Instead, ‘jobs, jobs, jobs’ were the focus of Rishi Sunak’s mini-budget, as he announced a number of measures to incentivise employment, with fears that unemployment will skyrocket in the coming months as the furlough scheme comes to an end.
But whilst the needs of freelancers and contractors were largely ignored by the Chancellor, who has regularly admitted that it’s impossible to help everyone in this crisis, there were nonetheless a number of developments that will be of interest to independent workers.
In this article, we’ll take a look at the key takeaways from the Summer Statement...
Job retention ‘bonus’
Having confirmed the Coronavirus Job Retention Scheme (CJRS) will end in October, the Chancellor then unveiled a ‘Job retention bonus’ to encourage employers to retain furloughed workers from this point on. Businesses will receive a £1000 ‘bonus’ from the Government for every employee paid over £520 per month kept on until the end of January 2021. How this will work - if at all - for contractors, who qualify for the CJRS remains to be seen. The devil will no doubt be in the detail.
‘Kickstart’ scheme for young workers
As part of a ‘Kickstart’ scheme aimed at getting 16-24 year olds currently claiming Universal Credit back to work, £2bn was pledged to fund 6 month work placements, with the money covering 25 hours per week at minimum wage.
In addition to this, from August and for six months, businesses will also receive a £1000 grant for every new apprentice brought on, £2000 for apprentices under 25 hired and £1,500 for those employed over 25.
VAT slashed for hospitality and leisure
VAT has been reduced dramatically for parts of the hospitality and leisure industries, dropping from 20% to 5%. This tax cut will apply to food and non-alcoholic drinks, accommodation and admissions from Monday 13th July until 12th January 2021, as the Government looks to increase demand for these services.
To spark further life back into restaurants, a scheme has also been created to offer half price meals up to £10 a head from Monday through to Wednesday in August, at participating businesses.
Stamp Duty holiday
Stamp Duty will not need to be paid when purchasing a property up to £500,000. This is effective immediately until 31st March 2021, as the Government attempts to revive the property market. Reports say this move will result in nearly 90% of transactions becoming tax-free, as a result.
While the Summer Statement was well received by some businesses, notably employers, the lack of any specific support for independent workers was a glaring omission. Granted, the self-employed will benefit from a Stamp Duty holiday and VAT cuts when eating out, but there’s no escaping the fact that huge numbers of freelancers and contractors have been overlooked when it matters most.
Given the 2021 rollout of IR35 reform in the private sector became a certainty last week, independent professionals have every reason to feel disappointed with the recent actions of the Government.
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