In the Spring Budget 2021, Rishi Sunak set out several new measures intended to restart the UK’s economic recovery. Our Employment Law team have reviewed the key points affecting UK businesses and provide advice for employers.
Rishi’s Budget 2021 | 3 Key Points
- 1. The Chancellor has promised an addition £44.3 billion in support measures for households, businesses and public services.
- 2. A temporary tax break has been introduced to the tune of £12 billion a year to encourage businesses to bring forward future investment spending into this year and next.
- 3. Looking to the long term, Rishi has announced a future increase in corporation tax rate, freezing personal tax allowances and thresholds, and reducing annual departmental spending budgets by £4 billion, raising a total of £31.8 billion in 2025-26.
The Chancellor confirmed supporting businesses was a priority, with the business rates holiday to be extended by a further three months until June 2021, and temporary 5% reduction in VAT extended until 30 September 2021, and a reduced rate of 12.5% applying until March 2022.
Furlough Scheme Extension
To the relief of many employers, Rishi has extended the furlough scheme until September 2021. It is expected that employers will be required to make contributions from July onwards, in the same way tailing off approach as was introduced last year, however this is likely to be depend upon economic conditions come July.
NMW Increase & Cash Incentives
- The Chancellor also confirmed an increase to National Minimum Wage (NMW), which will rise from £8.72 to £8.91 from April 2021.
- Cash incentives for business taking on apprentices will double to £3000 per apprentice recruited, and there will be increased funding to enable to creation of 40,000 new apprenticeships.
If you have any questions about how these measures will affect your business, or about any other HR issues you need advice and support with please get in touch today.