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UK Budget 2021 – headlines for employers

Article by: Stephens Scown Solicitors LLP

When Rishi Sunak presented the UK Budget last year on 11 March 2020, none of us had heard of furlough. Later that day, the World Health Organisation declared the outbreak of Covid-19 a pandemic and life as we knew it changed.

On that day, all of the Chancellor’s plans suddenly had to change overnight and we now find ourselves in more national debt than we have for more than 50 years. The red book for the Budget ran the line, “Protecting the jobs and livelihoods of the British people”, so what measures has the Chancellor announced that employers need to know about?

Extension of furlough scheme

Far and away, the biggest headline from the UK Budget is the extension of the furlough scheme until the end of September. Some might say the extension should have come sooner but either way, it provides five more months of support for employers under the Coronavirus Job Retention Scheme.

Statutory Sick Pay: Covid-19 rebate

Small and medium sized employers will continue to be able to reclaim up to two weeks of Statutory Sick Pay per eligible employee. This relates only to the temporary measure put in place around Covid-19 absence and the Government will be setting out steps for closing this scheme in due course.

More support for the self-employed

As well as supporting those in employed positions, the Chancellor announced a fifth cash grant for self-employed workers. It is estimated that this will capture more than 600,000 people, including many who became newly self-employed last year in the wake of the pandemic.

The fourth grant from the existing Self-Employment Income Support Scheme will be available to claim from February to the end of April and will pay out at a level of 80% of three months’ average trading profits up to £7,500.

The fifth grant announced today will run from May onwards to September 2021. The system will be open for claims from late July. The Chancellor wants this grant to operate on a more targeted basis. Those whose turnover has fallen by 30% or more will continue to be able to claim the full 80% grant. Those whose turnover has fallen by less than 30% will be limited to a 30% grant. The Chancellor has confirmed that anyone who had filed their tax returns for 2019/2020 by midnight on 2 March 2021 can claim the fourth and fifth grants.

Help to Grow

We know, as we work our way through the roadmap out of lockdown, that businesses will need to start looking creatively at how they rebuild and boost productivity. Doing so will be critical in retaining and growing workforces. The Chancellor has therefore introduced a two-part “Help to Grow” scheme in the UK budget.

The first part (Help to Grow: Management) has been developed with industry to offer access for SMEs to a national curriculum delivered through business schools, with practical case studies and mentoring. The course will take place over 12 weeks and the costs will be 90% subsidised by Government.

The second part (Help to Grow: Digital) is again aimed at SMEs and recognises how many businesses now have a much greater online offering. It offers access to free online courses and the purchase of productivity-enhancing software at a 50% discount.

These schemes are due to commence by Autumn but the Chancellor encouraged interested businesses to register now here.

Visas for high-skilled workers

Our immigration system is already braced for significant change in the wake of our departure from the EU. Businesses will need to get to grips with new ways of recruiting overseas workers and we already know that the Government’s focus has been on skilled migrant workers.

There are strict requirements around bringing in foreign workers but the Chancellor has announced a ‘fast-track’ visa scheme to be introduced by March 2022 help start-up and tech businesses recruit high-skilled workers from overseas. There are also other measures to be taken around talent and innovator visas, support for small firms using the visa system for the first time and modernising the immigration sponsorship system to make it easier to use.

New apprentice hire: incentive payment

We know that younger workers have been particularly hard hit by job losses through the pandemic. It probably comes as no surprise that the Chancellor is looking for ways to address that.

Employers will be able to claim £3,000 for each new apprentice hired (regardless of age) between 1 April and 30 September 2021. This is in addition to the existing £1,000 incentive payment the Government provides for all new 16-18 year-old apprentices and those aged under 25 with an Education, Health and Care Plan.

In the UK budget, the Chancellor has also pledged an additional £126 million to support traineeships, funding work placements and training for 16 to 24 year olds. Employers who provide trainees with work experience will continue to be funded at a rate of £1,000 per trainee; you can find more information about the scheme here.

Flexible apprenticeships

Finally, and in a move again intended to support younger generations, the Chancellor has created a £7 million fund from July 2021 for “flexi-job” apprenticeships. We’ll be putting a more detailed article together about these very shortly but they will allow apprentices to work with a number of different employers, provided they are all based within the same sector.

The extension of the furlough scheme will undoubtedly be a boost to some employers, particularly those in the hospitality and leisure and tourism sectors, but it comes at a significant cost. It will be some time before we see whether the Chancellor’s measures give employers the support they need whilst still enabling him to manage the impact of the pandemic on the UK.

Article by Stephens Scown Solicitors LLP

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