BUDGET 2021 – KEY POINTS
You will all be aware that the Chancellor, Rishi Sunak, unveiled his Budget last week.
In this blog, we go through the key points from the Budget and lay out what it means for businesses and employers.
Furlough Extended
The Chancellor announced that the furlough scheme, which was due to end at the end of April 2021, has now been extended until the end of September 2021. Employees placed on furlough will continue to receive 80% of their wages (up to £2,500 per month).
As with previous extensions of the furlough scheme, employers will be expected to contribute towards employees’ wages from July, as follows: –
● 10% in July;
● 20% in August and September.
Employers will also need to continue to meet the cost of National Insurance payments and pension contributions.
Who is Eligible for the Furlough Scheme?
The rules surrounding furlough differ slightly depending on what period the claim is for.
For furlough claims on or before 30th April 2021, to be eligible, the employee must have been on their employer’s PAYE payroll on 30th October 2020. The employer must also have made a PAYE Real Time Information (RTI) submission to HMRC between 20th March 2020 and 30th October 2020, thus notifying a payment of earnings.
Employees do not need to have been furloughed previously.
For furlough claims from 1st May 2021 onwards, the employee must have been on their employer’s PAYE payroll on 2nd March 2021. Again, the employer must also have made a PAYE RTI submission to HMRC between 20th March 2020 and 2nd March 2021.
Employers are not required to have previously claimed for employees before 2nd March 2021 to claim for periods on or after 1st May 2021.
The employee can be on any type of contract, including zero-hours, fixed-term or temporary.
Can I Re-Employ an Employee Who Has Recently Left or Been Made Redundant?
HMRC has confirmed that some employees can be rehired, and then put on furlough.
For claims on or before 30th April 2021, employers can choose to re-hire any staff made redundant after 23rd September 2020 and put them on furlough, as long as the employer made a PAYE RTI submission to HMRC in relation to that employee between 20th March 2020 and 23rd September 2020.
However, for claim periods starting on or after 1st December 2020, employers cannot claim for any days where a furloughed employee was serving a contractual or statutory notice period.
There is no obligation on employers to re-employ staff.
Apprenticeships
A further announcement made by the Chancellor is that the Apprentice grant has been doubled to £3,000 for any business taking on an apprentice under the Government apprenticeship scheme. This is an increase from £1,500.
If you require support with the matters above or any other Employment Law support please feel free to get in touch at www.orchardemploymentlaw.co.uk