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Summary of key budget issues for employers

Eligibility
The eligibility criteria for the furlough scheme will remain the same, covering all full-time, part-time, agency, flexible or zero-hour contract employees who were on their employer’s payroll before today’s extension was announced.

Pay
The Government will continue to pay 80% of employees’ wages for hours not worked in March, April, May and June. In July, the Government will contribute 70%, with employers contributing 10% of the wages. In August and September, the Government contribution will decrease to 60%, and employers will contribute the remaining 20%.

Other announcements
The Chancellor further confirmed that the National Living Wage will increase in April from £8.72 to £8.91.

A further grant under the Self-Employment Income Support Scheme will open in April, providing self-employed workers with the opportunity to claim for 80% of three months’ average trading profits up to £7,500.

Small and medium-sized employers across the UK will be able to continue to reclaim up to two weeks of eligible Statutory Sick Pay costs per employee.

The Government will extend the temporary reduced rate of 5% VAT for goods and services supplied by the tourism and hospitality sector until 30 September 2021.

The income tax exemption and NICs disregard for COVID-19 antigen tests provided by, or reimbursed by, employers for the next tax year. This exemption will also be extended for employer reimbursed expenses covering the cost of home office equipment.

Robert Holland, Head of Employment, commented on the announcement: “The extension of the furlough scheme until the end of September will be a welcome development for many employers in maintaining their businesses through the coronavirus pandemic. If you require any tailored legal advice regarding this scheme, please get in touch with our Employment team.”

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