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Autumn Budget 2021: How will it impact your business or charity?

Chancellor Rishi Sunak announced the much-anticipated Autumn Budget this afternoon (27 October), proclaiming it as, amongst other things, a means of “promoting high skills, high productivity and higher wages”. In this article we discuss the headline points set to impact employers and employees over the coming months.

Living Wage and National Minimum Wage

The Chancellor announced that national living wage will increase by 6.6%, from £8.91 to £9.50 per hour for those aged 23 and over. This increase, which will come into force from 1 April 2022, will increase the incomes of full-time workers by £1,000 a year.

Those workers below age 23 are eligible for the national minimum wage, which will also increase from 1 April. Those aged 21-22 will see an increase from £8.36 to £9.18 an hour. Apprentices, who must be aged 16 or over and not in full-time education, will see a rise from £4.30 to £4.81 an hour.

UK-wide numeracy service – Multiply

Sunak emphasised the importance of providing a high quality education to all members of the British public, asserting that it leads to higher productivity and higher wages. The new UK-wide scheme, ‘Multiply’, will help up to 500,000 adults improve their numeracy skills. Sunak also announced the government’s plan to increase spending on skills and training by over 42%.

Universal Credit Taper Rate

Sunak described the universal credit taper rate – this being the way in which your maximum universal credit award is reduced when you start earning again – as a tax on work, and announced the rate will be cut by eight percentage points (from 63% to 55%). Sunak said that as a result of this change, due to be introduced within weeks, a single mother of two renting and working full time on the national living wage will be better off by around £1,200.

National Insurance Rates

This was announced in early September, but is worth reiterating here. From April 2022, both employers and employees will pay 1.25 percentage points more in National Insurance. This will have the effect of increasing the employer basic rate from 13.8% to 15.05%.

Scale up visa

Sunak also announced a new “scale up visa”, the purpose of which is to make it “quicker and easier” for rapidly-growing businesses to recruit highly skilled workers from overseas.