Furlough Scheme Extended: The Chancellor announced the annual budget to Parliament on 3rd March 2021 which featured updates on the furlough scheme, support for businesses, and management training available to SME’s.
During Rishi Sunak’s budget speech, it was confirmed that the furlough scheme will continue until the end of September 2021.
Here are the key points to keep in mind:
- Businesses will continue to be entitled to receive 80% of staff wages with a cap of £2500 per month.
- You can choose to fully furlough an employee or opt for flexible furlough where they work reduced hours.
- In July, the furlough scheme will change as employers will then be expected to pay 10% of the furloughed waged. They must also make National Insurance and pension contributions.
- The furlough scheme will update again in August with employers being expected to pay 20% of furloughed wages as well as pension and NI contributions.
The government implied they would put an alternative retention scheme in place after this. However, there was nothing referring to this in the budget. In addition, it’s very unlikely a job retention bonus similar to the one scrapped last October will be available.
The ‘Help to Grow’ Scheme
The scheme has been designed to help small and medium businesses learn new skills, reach new customers, and boost profits. The scheme is split in to 2 different options:
Help to Grow Management
From June 2021, SME’s will be able to utilise a 12 week programme led by top business schools across the UK. They will be provided with a mentor who will guide them through peer-learning sessions. This programme will help your team to strengthen their financial and strategic skills. Find out more on the government website now.
Help to Grow Digital
From this Autumn, small businesses will have the opportunity to boost their digital skills and discover how technology can improve business. Eligible businesses will also be able to access 50% off selected software up to the value of £5,000. Find out more on the government website now.
Other Employment Law Announcements:
- The Government have announced that the National Living Wage will be increased from £8.72 to £8.91 for 25 year olds and older. This increase will take place in April.
- Personal allowance threshold will rise in April but will then be frozen until 2026.
- Rishi Sunak also announced that the government will be doubling the incentive payments for businesses employing new Apprentices to £3,000. There are different rules in Scotland – https://www.ourskillsforce.co.uk/invest-in-young-people/apprenticeships/
If you would like any further advice on how the furlough scheme extended and support included in the budget, contact us now.