Budget 2021 - Whats Changing?

The March 2021 budget is aimed at protecting jobs and the livelihoods of the British people.  The chancellor, Rishi Sunak,  outlined many initiatives to kick start the economy, to offer support to the unemployed, self-employed, companies and industries who continue to be impacted by the coronavirus pandemic.

So what’s changing?

• The Coronavirus Job Retention Scheme (CJRS) has been extended to the end of September.  There is no change for employees who will continue to receive 80% of their wages, subject to the cap.  It is however important to note that the scheme will not operate in the same way from July when employers must start to make contributions to the employees pay.  The overall furlough payment will continue at 80%; with the option for employers to top up employees pay. However, from 1^st July 2021; employers will contribute 10% and 70% will be paid by the government through the furlough grant and from 1^st August the employer contribution will rise to 20% with 60% being paid by the government through the furlough grant.
• Eligibility for CJRS has been extended for periods of furlough on or after 1^st May 2021.  Employers can claim if employees were employed on or before 2^nd March 2021 as long as the PAYE real time information submission to HMRC was made between 20^th March 2020 and 2^nd March 2021. 
• For employees on fixed term contracts of employment; claims for CJRS can be made for periods on or after 1^st May as long as the employee was employed on 2^nd March 2021. 
• The chancellor announced two ‘help to grow’ schemes which will be launched in summer 2021.  These included management training scheme for SME’s where the government will cover 90% of the cost and in recognition of the technology world a ‘digital scheme’ which will give smaller companies access to free expert training and a 50% discount on productivity enhancing software.  More details of these schemes will be published soon.   
• The incentive payments for companies to employ apprentices will double to £3000.

SME

While the extension of the furlough scheme is welcomed by many and will undoubtedly save many viable jobs; it is questionable how much longer can SME’s manage.  Many predict companies will evaluate business needs which may lead to a sharp rise in redundancies and the loss of true talent and experience.  Remember despite the continued challenges presented by the pandemic, companies must comply with all employment law.  Before jumping into making a ‘rash’ decision like making staff redundant or retracting a job offer call Quest to explore all options available.