Yesterday, the Chancellor announced the Budget for 2021. His key message was that he would continue to support businesses and livelihoods even after the ‘road map’ out of lockdown had expired, to help with the aftermath of COVID-19.
There were a number of announcements made, but those particularly relevant to employers are detailed below:
Furlough Extended to September 2021
Rishi Sunak announced that the furlough scheme, which was due to come to an end at the end of April, will be extended for a further 5 months – until the end of September 2021.
There will be no change as to how the scheme is run during this time, or who will qualify.
March, April, May, June
For the next few months, the scheme will not change. The employee will still receive 80% of salary, up to a maximum of £2,500 (gross) per month and the government contribution will be the full 80%.
Employers will continue to be responsible for paying all NI & pension contributions for hours worked and not worked (up to 80% or a maximum of £2,500 gross per month).
July
From 1st July, the employee will still receive 80% of salary, up to a maximum of £2,500 (gross) per month, however, the government contribution will be a maximum of 70%.
This means that the maximum amount an employer can claim via the CJRS is 70% of salary or a maximum of £2,187.50 (gross) per month.
Employers are expected to pay the additional 10% and all NI and pension contributions for hours worked and not worked (up to 80% or a maximum of £2,500 gross per month).
August & September
From 1st August, the employee will still receive 80% of salary, up to a maximum of £2,500 (gross) per month, however, the government contribution will be a maximum of 60%.
This means that the maximum amount an employer can claim via the CJRS is 60% of salary or a maximum of £1,875 (gross) per month.
Employers are expected to pay the additional 20% and all NI and pension contributions for hours worked and not worked (up to 80% or a maximum of £2,500 gross per month).
Increased Investment in Apprenticeships & Traineeships
The incentive payment to hire an Apprentice has been increased from £2,000 to £3,000. It has also been extended until September 2021.
There will also be a new “flexi-job” apprenticeship programme in England that will enable apprentices to work with a number of different employers in one sector.
There will also be additional funding high quality work placements and training for 16-24 year olds in 2021/22 academic year.
The Kickstart scheme continues to operate.
Additional Business Support
Extension to the VAT cut to 5% for hospitality, accommodation and attractions across the UK until the end of September, followed by a 12.5% rate for a further six months until 31 March 2022.
New Restart Grants – a one off cash grant of up to £18,000 for hospitality, accommodation, leisure, personal care and gym businesses in England.
Business rates relief for eligible businesses in the retail, hospitality and leisure sectors in England will benefit from business rates relief.
For a full and comprehensive list of all announcements and commitments made within the Budget, please see gov.uk.