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Chancellor Rishi Sunak has announced certain measures in the Spring Budget 2021 in order to protect jobs and livelihoods due to the ongoing impact of COVID-19. We have listed some of the key changes below.
The Furlough Scheme in the UK has been extended to 30 September 2021, originally from 30 April 2021. You are able to apply for the Furlough Scheme, even if you haven’t used the scheme before, however an employee must have been on the payroll from 2 March 2021 for periods starting on or after 1 May 2021.
Under this Scheme, employers will be expected to pay for 10% of a furloughed worker’s wages in July, raising to 20% in August and September. Chancellor Rishi Sunak said that firms are being asked to make a “small contribution” to the hours not work by their staff, but employees will continue to receive 80% of their wages, up to the £2,500 cap until September 2021.
There is also an extension of the UK-wide Self Employment Income Support Scheme to September 2021, with 600,000 more people who field a tax return in 2019-2020 now able to claim for the first time.
There will be a freeze on rates of income tax and national insurance. The personal threshold will rise next year to £12,750 and will be frozen until April 2026.
The National Living Wage will increase to £8.91 from April. This rate will also become available to those aged 23 instead of those aged 25.
The role of technology has had a massive impact on businesses during the COVID pandemic, and the government has launched a new digital training scheme for businesses, called “Help to Grow: Digital”. Small and medium sized enterprises will be eligible to register for the digital training. Management training will also be provided through executive development programmes in partnership with business schools, with the government funding 90% of the costs through “Help to Grow: Management”.
In addition to the Restart Programme, Kick Start Scheme and life time skills guarantees, an employer who hires new apprentices between 1 April 2021 and 30 September 2021 will receive £3,000 per each new hire, compared with £1,500 per new apprentice hire and £2,000 for those aged 24 or over, under the existing scheme.
The government has confirmed that the proposed changes to the off-payroll working rules, IR35 for the public sector and for medium and large businesses, will take effect from 6 April 2021. Amongst other changes, all public sector clients and medium/large sized private sector clients will be responsible for deciding your worker’s employment status.
Many businesses have had to re-think their business models and adapt due to the impact of the pandemic, with wider use of technology and need to train the workforce. This continues to be a challenge for businesses, with the ongoing expectation of continued homeworking.
The government has announced the measures in the Spring Budget for COVID-hit businesses and workers, with the view of protecting jobs and livelihoods. Many will hope that the extension of the Furlough Scheme will steer away from the need of wide scale redundancies as the vaccination programme continues to progress.
For further information on the other measures in the Spring Budget, follow the link to the Government website: https://www.gov.uk/government/news/budget-2021-what-you-need-to-know