The 2021 Budget and what this means for Employers – March 2021

We have briefly set out below the key points set out by Rishi Sunak to consider for employers:

• The 2021 Budget announcement has set out that the furlough scheme will be extended until the end of September. Under the Coronavirus Job Retention Scheme, employees on furlough are entitled to receive 80% of their wages. Employers will be expected to pay 10% towards the wages in July and 20% in August and September. This means that you are now able to keep employees on furlough until September where there is a lack of work due to coronavirus. If you are unsure whether your employees will be eligible for furlough then please contact us.

• The Budget announcement has confirmed that income tax thresholds will increase to £12,570 in April but will freeze at that level until April 2026. The higher rate threshold will similarly be increased next year, to £50,270, and will then also remain at that level for the same period.

• Please be aware that people’s take-home pay will not decrease because of the policy change.

• The announcement confirmed that there will be no increase to income tax, national insurance or VAT.

• Mr Sunak has pledged to create 40,000 additional traineeships and offered cash incentives for employers who take on an apprentice. Cash grants for employers hiring apprentices will double to £3,000 regardless of age.

If you would like to discuss any of the points mentioned in this document with our qualified employment team then please contact us on 0330 088 2275 or employment@fta-law.com for more information.