Key figures for employers - spring budget 2021
At the beginning of this month, Rishi Sunak announced the highly anticipated Spring Budget for 2021, hailing protection for the “jobs and livelihoods of the British people”.
Coronavirus Job Retention Scheme (CJRS)
The headline announcement for employers is the extension of the Coronavirus Job Retention Scheme (CJRS) to 30 September 2021. The Government’s contributions will be tapered, reducing from 80% to 70% as from 1 July 2021 and 60% as from 1 August 2021. Employers will therefore be required to contribute the remaining 10% and 20% of furloughed workers’ wages respectively, in addition to the associated national insurance and pension contributions on all furlough pay.
The Chancellor stated a commitment to clamping down on fraudulent use of the CJRS, with the Government investing over £100 million in a Taxpayer Protection Taskforce. Employers must therefore exercise caution and refer to the guidelines closely when accessing CJRS grants.
Further measures impacting upon employers include: -
- All small and medium sized employers can continue to reclaim up to two weeks’ Statutory Sick Pay costs for each eligible employee, where the absence relates to Covid-19. Though re-iterated as a temporary scheme, the Chancellor made no comment as to when this support will end.
- The National Living Wage will increase to £8.91 per hour from April 2021, becoming available to those aged 23 years and over (rather than 25 years at present). There is continued support for those on Universal Credit with the £20 uplift being extended for a further 6 months.
Self-employed Income Support Scheme (SEISS)
The Self-Employed Income Support Scheme (SEISS) has also been extended to the end of September 2021, offering a welcome relief to the self-employed population. The Chancellor announced details of a fourth grant, running from February 2021 to April 2021, which will cover three months’ trading profits subject to a limit of £7,500. The fifth and final payment will cover May 2021 to September 2021, the level of which will be determined by the loss of turnover experienced during that period.
As means to incentivise apprenticeships, the Government announced that for each apprentice (irrespective of age) hired between 1 April 2021 and 30 September 2021, an employer will receive £3,000. This is an increase from the previous figure of up to £2,000 and which was dependent on the age of the apprentice.
The Budget confirmed a freeze on rates of income tax and national insurance. The personal tax threshold will rise next year to £12,750 however, will then be frozen until April 2026.
The Budget announcements demonstrate the Government’s pledge to support businesses to get back up and running in accordance with the Prime Minister’s Roadmap. This will no doubt come as a relief to many, allowing a degree of breathing room in the months to come. However, with the Government’s total coronavirus spending reaching a staggering £407bn, there is inevitable concern as to how this will be repaid in the years ahead.