Overview of employment aspects of the Spring 2021 Budget

Budget announcement signals more of the same for 2021.

Chancellor Rishi Sunak’s statement on 3rd March 2021 contained a number of announcements on key matters concerning employment, largely around the ongoing Coronavirus Job Retention Scheme (CJRS) and its further extension into 2021.  Below we have highlighted some of the key takeaways for employers.

Continuation of the CJRS

The Chancellor announced that the CJRS will be extended for a further five months from the end of April to the end of September 2021.  Employees will continue to receive at least 80% of their current salary for hours not worked and there will be no employer contributions beyond national insurance contributions and pension contributions in April, May, and June.  However, from July the government will introduce employer contributions to top up wages for unworked hours to at least 80%. The CJRS grant will cover 70% of furloughed wages from July onwards with employers paying at least a 10% top up.  From August until the end of the scheme, the grant will cover 60% of furloughed wages and employers will pay at least a 20% top up. Employees will continue to be able to work some hours and to be furloughed for others on a flexible basis.

Statutory Sick Pay Rebate Scheme

At this time, employers with fewer than 250 employees can apply to HMRC for reimbursement of two weeks’ SSP per eligible employee for sickness absence due to Covid-19.

Employers with fewer than 250 employees on 28 February 2020 across all their PAYE payroll schemes will continue to be able to reclaim up to two weeks of eligible SSP costs per employee.  The scheme is intended as a temporary Covid-19 measure to support employers while levels of sickness absence are high.  The government will set out steps for closing this scheme in due course.

Covid-19 Fraud

The chancellor announced that the government will invest over £100 million into a Tax Payer Protection task force at HMRC, who will be charged with combatting fraud within the Covid-19 support packages, including the CJRS and self-employed schemes. This represents one of the largest responses by HMRC to a fraud risk.  In addition, the government will raise awareness of enforcement action in order to deter fraud.

Traineeships and Apprenticeships

On 28 January 2021, the government announced that employers who created new traineeship opportunities could apply for a cash payment of £1,000 for each trainee they take on up to a maximum of 10 trainees.  The scheme will be available until 31 July 2021 and employers can claim the cash incentive for all work placements that have been completed since 1 September 2020.

The Chancellor announced that the government will provide an additional £126 million  in England for high quality work placements and training for 16 to 24 year olds in the 2021-2022 academic year.  Employers who provide trainees with work experience will continue to be funded at a rate of £1,000 per trainee.

As part of its Plan for Jobs, the government had previously announced that apprenticeships would be supported by bonuses, with employers entitled to a payment of £2,000 for each young apprentice they take on under the age of 25 and £1,500 for each apprentice aged 25 or over.  The Chancellor announced that payments made to employers in England who hire new apprentices will be extended and increased.  Employers who hire a new apprentice between 1 April 2021 and 30 September 2021 will receive £3,000 per new hire.  This is in addition to the existing £1,000 payment that the government provides for all the new 16 to 18 year old apprentices and those aged under 25 with an education, health and care plan, where that applies.

The government will also introduce a £7 million fund from July 2021 to help employers in England set up and expand portable apprenticeships.  This aims to enable people who need to work across multiple projects with different employers to benefit from the high-quality, long-term training that apprenticeship provides.  The aim is also for employers to benefit from access to a diverse pool of apprenticeship talent.  Employers will be invited to bring forward proposals as will the Creative Industries Council in recognition of the potential benefits of this new approach for the creative sector.

Comments

The Chancellor’s latest budget statement did not contain any radical new proposals for employment in the UK.  At this time, the emphasis is still on guiding the UK economy through the difficulties posed by the ongoing pandemic and trying where possible to keep people in work and keep business viable so that they are in place once the lockdown is over.

Cautiously, the key announcements on continuing support maintain the idea that the government expects 2021 to be the year in which the UK emerges from lockdown into more familiar working practices.