Speaking in the House of Commons on Wednesday, Chancellor Rishi Sunak unveiled a new tax plan which is aimed at kickstarting the UK’s economic recovery following the Coronavirus pandemic.
Rishi Sunak announced his new tax plan in a mini-budget – which he claims will “protect, support and create jobs” and it includes many temporary tax provisions to encourage spending within the economy to re-start economic activity and put Britain on the road to recovery.
The Chancellor announced that VAT on food, non-alcoholic drinks, accommodation and attractions will be cut from 20% to 5% from next Wednesday until January, which he claims will give the industry a $4billion boost and encourage more consumer spending and economic growth.
He has also announced a 6 month holiday on Stamp Duty tax – which is a tax on the sale of housing and properties – to the value of £500,000, which will aim to boost the housing market once again and prevent a collapse in house prices caused by the freezing up of the market.
The current tax-free threshold on Stamp Duty is £125,000, with properties over that value taxed at different rates dependant on their value, including 5% on properties between £250,001 and £925,000. 5% will now apply on any properties sold between £500,000 – £925,000.
The cut will last until March 2021 and will is expected to be phased out as the nation recovers from the crisis.
For a buyer purchasing a house for around £500,000, that would mean a potential £15,000 tax saving.
Mr Sunak also announced on Wednesday that £3 billion was being set aside for greening the recovery – an extension of the statement by the Prime Minister, Boris Johnson, who last week claimed that Britain would “build back greener”. The Chancellor is further set to make an extra £1billion available to the Department for Work and Pensions, in an attempt to ensure growth in the jobs market as Britain aims to recover from the economic crisis.
Photo Credit: Andrew Parsons / No 10 Downing Street under licence (CC-BY-NC-ND 2.0)
