Two immediately positive takeaways from the highly anticipated Budget 2021 announcement by Chancellor, Rishi Sunak, are:
(1) the prediction that the economy will bounce back this year, with a projected annual growth of 4% and an expectation of pre coronavirus levels by the middle of 2022; and
(2) the government’s focus to “protect the jobs and livelihoods of the British people” as the country continues to navigate its way through the coronavirus pandemic.
What do employers need to know?
Furlough scheme extended
Originally due to end at the end of April 2021, the government confirmed on Wednesday that the highly successful Coronavirus Job Retention Scheme (“CJRS”) will be extended for a further five months from May 2021 to the end of September 2021. Employees will continue to receive 80% of their salary for hours not worked under the CJRS scheme (up to the cap of £2,500) and employers will not be required to make any contributions beyond pension and National Insurance Contributions (NIC’s) between April to the end of June.
From July 2021 onwards, employers will have to contribute towards the cost of unworked hours starting with 10% in July and rising to 20% in August – September 2021.
The extension of the scheme will come as a welcome relief for employers who are still struggling to support staff due to the impact of coronavirus on their businesses. By extending the scheme beyond the anticipated ‘easing of lockdown’ on 21 June 2021, employers will continue to have access to government support as their businesses hopefully begin to bounce back and recover.
It is expected that over 1,000 new investigators will be recruited by HMRC in a bid to tackle furlough fraud, as part of HMRC’s new Taxpayer Protection Taskforce.
National Living wage set to increase
The NMW will rise to £8.91 per hour (an increase of £0.19) in April 2021. The government announced that the current NMW age threshold which applies to workers aged 25 and above will decrease to capture workers aged 23 and above, therefore increasing the number of workers eligible for the NMW.
Apprentices (under 19 or in their first year) will be paid a minimum of £4.30, aged 16 -17 will receive £4.62, aged 18 – 20 will be entitled to £6.56 and aged 21 -22 will receive £8.36.
Statutory sick pay (“SSP”)
Small and medium-sized employers can continue to reclaim the cost of up to two weeks of eligible SSP per employee.
Rewards for apprenticeships
The government will extend the apprenticeship hiring incentive in England until September 2021 and has increased the incentive payment to £3,000 (per apprentice) for any business taking on a new apprentice of any age. This more generous than the previous incentive which offered employers £2,000 for apprentices aged 16 – 24 or £1,500 for apprentices aged 25 and over.
The above is in addition to the existing £1,000 payment that the government provides to employers engaging new apprentices aged 16 -18 or under 25’s with an education, health and care plan.
The government is also introducing a £7 million “flexi-job” apprenticeship programme in England that will allow apprentices to work for multiple employers across one sector. This is expected to benefit employers as they will have access to a diverse apprenticeship talent ‘pipeline’.
“Help to Grow” is a new scheme which is intended to help upskill SME’s by combining practical case studies, mentoring from business professionals and national curriculum delivered through business schools. It is proposed that the programme will last twelve weeks, and the government will subsidise 90% of the scheme.
It is expected that by March 2022, the UK will have an “elite points-based” visa system to attract and retain talent from around the globe. The focus is to attract those in academia, science, research and technology. This will include a “scaleup” stream to enable those with job offers from a recognised UK scale-up to qualify for a fast-track visa. The Global Talent visa and Innovator Visa’s will be reviewed and reformed and a new Global Business Mobility visa will be launched by Spring 2022 for overseas businesses to transfer staff to the UK or establish a presence in the UK. It is expected that the sponsorship system will be modernised to make it easier to use.
The government is set to publish a roadmap by summer 2021.
If you would like further information about how the budget may affect your business or any other employment law advice, please contact us on 0161 437 0013 or by email to email@example.com.