Employment Advisory: 2021 UK Government Budget

3 March 2021 Advisory

Chancellor Rishi Sunak has today unveiled his budget, setting out the U.K. government’s plans for 2021/2022, announcing new measures in a bid to help U.K. businesses and jobs through the global pandemic.

The main workplace-related announcements are as follows:

Coronavirus support

  • The Coronavirus Job Retention Scheme (CJRS) has been extended until the end of September 2021, continuing to pay up to 80% of employees’ wages. However, employers will be asked to contribute 10% in July and 20% in August and September, as the CJRS is gradually phased out.
  • 600,000 more self-employed people, of whom a large percentage have lost their jobs to the pandemic, will become eligible for government help, as the access to grants will be widened.
  • The U.K. national minimum wage (at full rate) will increase to £8.91 an hour from April 2021.

Employment taxation

  • There will be no changes to the rate of income tax or national insurance.
  • The personal income tax allowance will remain the same at £12,570 from April 2022 until 2026.
  • The higher rate income tax band will remain unchanged at £50,270 from 2022 until 2026.

Amongst other significant announcements made, the Chancellor confirmed that corporation tax will increase from 19% to 25% in 2023, with an exemption in place for smaller businesses (who have profits of less than £50,000) and the rate tapered for companies with profits of less than £250,000.

We expect that further information on each of the announcements will be published by the Government on their websites.  The detailed, 106-page report can be found here.

If you require any further advice on U.K. employment matters, please contact your regular AT attorney or those listed on this advisory.

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