Following yesterday’s Budget, we take a look at some points of interest for employers.

The extension of furlough

The headline for employers was the announcement that the furlough scheme (Coronavirus Job Retention Scheme or CJRS) is being extended until the end of September 2021.

This is a further 6-month extension, following on from the last extension announced in December. By the time this latest extension expires, the CJRS will have been in place for eighteen months.

The extension will apply across the UK.

The government will continue to pay 80% of wages for the time the employee spends on furlough (subject to the existing cap of £2,500 per month per employee) until the end of June 2021.

With effect from July, there will be a tapered reduction in government contribution to wages. In July, the government’s contribution will be 70%. For August and September this contribution will reduce to 60%. Employers will need to make contributions of respectively 10% (July) and 20% (August and September) for hours not worked so that the employee receives 80% of wages for hours not worked up to £2,500 per month.  Please see this table for more details.

So, who is eligible to be furloughed during the 6-month extension? For the extension period (i.e.,1 May 2021 onwards) employees have to have been employed on/ by 2nd March 2021 (i.e., day before the Budget) and an RTI submission made by 2 March 2021 notifying a payment of earnings for that employee. An employer does not need to have previously claimed for an employee for that employee to be furloughed on or after 1 May 2021.

The announcement will be welcome news for many employers who had been contemplating redundancies because it will provide further funding for furloughed employees’ wages. This is particularly true for those employers who were contemplating large scale redundancies of 20 or more employees, where collective consultation is required.

Unfortunately, however, for some employers this further extension will only delay discussions about potential redundancies. It will make no difference to employers whose current financial situation makes it necessary to either embark on or continue with discussions about potential redundancies to take effect before the furlough scheme expires.

If you wish to discuss the furlough extension, the furlough scheme or redundancy, please get in touch with a member of the Employment team directly.

Combatting furlough fraud

The Chancellor also announced an investment of over £100million to combat fraud within COVID-19 support measures, including furlough fraud. This will take the form of a Taxpayer Protection Taskforce of over 1,000 HMRC staff.

If you receive a letter from HMRC or find yourself facing an HMRC inspection, we can advise how to respond, and guide you through any inspection process including, where appropriate, making representations on your behalf, defending any allegations and challenging any penalties. Please visit our dedicated webpage for more details.

Also, from an employment perspective…

A number of other measures were announced in the Budget. These include:

• The apprenticeship hiring incentive in England has been extended and the payment will increase to £3,000.
• With effect from July 2021, a new flexi-job apprenticeship programme will be introduced in England. The aim is to allow apprentices to work with a number of employers in one sector, benefitting both apprentices and employers.
• The National Living Wage will increase to £8.91 from April. On this note, as we’ve previously discussed, with effect from April 2021 the age threshold for receiving the National Living Wage (NLW) will reduce from 25 years of age to 23 years of age.
• The Statutory Sick Pay (SSP) Rebate Scheme, which currently allows employers with fewer than 250 employees to claim reimbursement for up to 2 weeks of COVID-19 related SSP per employee will continue.

The Budget was silent on another postponement of the Off-Payroll working rules. This puts an end to discussion on further delay or a U-turn on the IR35 changes which are coming into effect on 6 April 2021. If they haven’t already, businesses now need to get themselves ready for these new rules. to ensure that they are prepared by the time the changes are implemented in April 2021. Please contact our team of experts for advice.

Business Immigration

Yesterday’s Budget saw more talk of immigration, in particular, it was stated that ‘reforms to the immigration system will help ambitious UK businesses attract the brightest and best international talent’, despite the biggest shake up the immigration system has seen in more than 50 years having taken place just months ago.

According to the Budget report, the government is modernising the immigration system to help the UK attract and retain the most highly skilled, globally mobile talent – particularly in academia, science, research and technology – from around the world. This will drive innovation, and support UK jobs and growth.

The government is looking to provide preferential treatment to fast-growing ‘scale up’ companies, with reports earlier in the week suggesting this was aimed at Fin-Tech companies. The question remains though, are the skills of migrant workers not required across all sectors?

Welcome news is that of reforms to the Global Talent visa, with changes to include an expansion of the eligibility criteria to allowing holders of international prizes and winners of scholarships to automatically qualify from 5 May 2021, along with a much-needed review the Innovator visa to make it easier for those founding innovative businesses to obtain a visa.

For advice on business immigration please visit our dedicated webpage or contact a member of our specialist Business Immigration team

Speak to us

If you have any questions about any of the topics discussed in this article, please do get in touch with a member of our Employment team or our Business Immigration team as appropriate.

This article contains a general overview of information only. It does not constitute, and should not be relied upon, as legal advice. You should consult a suitably qualified lawyer on any specific legal problem or matter.