Budget 2021: Furlough is once again extended
Chancellor Rishi Sunak has revealed that furlough will be extended until September, as he delivered the Budget 2021 statement.
Otherwise known as The Coronavirus Job Retention Scheme (CJRS), it pays 80% of employees’ wages.
Originally introduced on 20 March 2020, the CJRS was many peoples’ first introduction to furlough and among the Government’s first key protective measures against the economic impact of the COVID-19 pandemic.
To this day, furlough has protected more than 11 million jobs, and it’s been the driving factor behind the slowed pace of redundancy, the Government said.
“Our COVID support schemes have been a lifeline to millions, protecting jobs and incomes across the UK,” Mr Sunak said.
“There’s now light at the end of the tunnel with a roadmap for reopening, so it’s only right that we continue to help businesses and individuals through the challenging months ahead – and beyond.”
What exactly has the Budget changed regarding furlough?
“It’s incredible to think that last year’s Budget did not even contain the word ‘furlough’.” – Faisal Islam, Economics Editor, BBC
It seems that the Coronavirus Job Retention Scheme is now here for the long run as the Chancellor confirmed an extension to September, with no immediate change of terms.
Furloughed employees will not see any change to their support, and they’ll continue to receive 80% pay for the hours they haven’t worked.
But employers will see some slight alterations from July. Businesses will be asked for a 10% contribution after July, rising to 20% in August and September.
How else will the Budget impact businesses?
Chancellor Rishi Sunak delivered his much-anticipated 2021 Budget, with numerous changes that will impact businesses.
In an attempt to kickstart the economy, Mr Sunak announced a range of support that will help over one million people get into work.
Firstly, the incentive payments that businesses receive for hiring apprentices will now be doubled to £3,000 for each new apprentice hired between 1 April to 30 September 2021.
Also announced was a Restart Grant that will provide additional funding for businesses to help them reopen and get going again.
Non-essential retail businesses will receive grants of up to £6,000.
As hospitality and leisure businesses are expected to face greater difficulties, and are not allowed to open as soon, they will receive grants of up to £18,000.
Recovery loan scheme
A new recovery loan scheme open to businesses of all sizes was also revealed.
Through to the end of this year, businesses will be able to borrow between £25,000–£10m, with the Government providing lenders with a guarantee of 80%.
National Living Wage changes
The National Living Wage (NLW) has seen an increase to £8.91, which is equivalent to almost £350 a year.
Also, the age limit to receive the National Living Wage is dropping from 25 to 23.
Personal tax thresholds will be frozen
Sunak says as planned, the basic allowance will still go up to £12,570, and the higher rate threshold will rise to £50,270.
However, these rates will now be frozen from April 2021 to April 2026.
The VAT registration threshold will remain at £85,000 until 2024.
From April 2023, corporation tax will rise from 19% to 25%, but businesses with a profit of less than £50,000 will still only pay 19%. Only businesses with profits of £250k and above will have to pay the new highest rate in full.
Super-deduction tax break
Businesses looking to invest will see a ‘super-deduction’, allowing them to reduce their tax bill by 130% of what they spend on investment.
How can IRIS Cascade help?
As always, the Budget has brought with it a range of changes that businesses will need to tackle.
For those looking to manage the changes to furlough or take advantage of the additional funding to bring on more people – IRIS can help.
Our HR Software, IRIS Cascade HRI, covers everything from core HR functionality to integrated payroll, recruitment, training and talent management.
“We’ve created a screen on IRIS Cascade that records data, so we know if anyone has a COVID-related absence. We can also see if they’ve been tested. Plus, within the system, it shows if the test has come back positive or negative.” – Emma Walton, HR Administrator, Dougie Mac
To see first-hand how IRIS Cascade HRI can support your needs, request a demo here.
For those looking to improve their workflows, we’re also offering a limited time offer for £495, where we install a COVID workflow within IRIS Cascade HRI that allows employees to register when they’ve been vaccinated.
Existing customers can access the offer by speaking with their Account Manager, and new customers can book a discussion by emailing us at email@example.com.