The Roadmap and Budget 2021: A summary for UK businesses

Emma Gross
9 March 2021

The Roadmap

Following Boris Johnson’s roadmap out of lockdown, we know that non-essential retailers, hairdressers and close contact services, along with pubs and restaurants offering outdoor dining can reopen on April 12th, indoor hospitality can begin to open up on May 17th, but employees should continue to work from home until a full review of the vaccination programme is completed on June 21st.

Social Distancing

It is hoped that after the review, social distancing measures can be relaxed, or even lifted, and the restrictive “one metre plus” rule will no longer act as a barrier to businesses, especially those within hospitality. The “one metre plus” rule means that people can be one metre apart so long as they also have additional barriers to transmission in place – i.e. a face covering or a divider screen. If such measures are not in place, the two metre rule applies.

Mr Johnson told MPs that the “journey back towards normality” would rely on resolving several issues including how long there would be a need to maintain social distancing and to wear face masks. “This will also inform guidance on working from home, which should continue wherever possible until this review is complete,” he said.

Government scientists are allegedly arguing to keep social distancing measures in place for now, but this decision continues to have a negative impact on shops, hospitality, cinemas and theatres. Some ministers are pushing back against this recommendation as the ongoing restrictions could push some firms to bankruptcy. The distancing measures make it harder for a number of businesses to keep trading as they cannot serve enough customers to make opening profitable, or in some cases even viable.

Mr Johnson’s roadmap document said: “Social distancing is difficult and damaging for businesses and, as a result, it is important to return to as near to normal as quickly as possible.”

The Budget 2021

The Coronavirus Job Retention Scheme (CJRS)

Chancellor Rishi Sunak has now confirmed that the government will extend furlough until the end of September, in an attempt to continue to protect millions of jobs and businesses, as the Prime Minister stated that the Government will “continue to do whatever it takes to protect jobs” for the “duration of the pandemic.” Employers are to be asked to contribute 10% in July and 20% in August and September towards the hours that their staff are not working. The cap of £2,500 will remain in place.

Neither the employer or employee need to have used the CJRS before to apply for a grant under the extended scheme, but for periods from 1 May 2021 onwards, an employee must have been on payroll on 2 March 2021.

Whilst this will be reassuring to hear, many businesses will remain anxious as they face more months of uncertainty over when they may be able to open their doors and begin trading again. Whilst the furlough scheme covers their employees wages, they still face the mounting costs of employer national insurance and pensions contributions, as well as any commercial rents due.

The Self Employment Income Support Scheme

The Chancellor also announced details of the fourth and fifth payments for the self-employed income support scheme (SEISS). These grants will take into account 2019 to 2020 tax returns and will be open to those who became self-employed in tax year 2019 to 2020. The rest of the eligibility criteria remain unchanged. This is anticipated to extend the scheme to an additional 600,000 workers.

The fourth payment, which covers February to April 2021, will be worth 80% of three months’ average monthly profits and is capped at £7,500. The grant may be claimed from late April 2021. The fifth and final payment of the scheme will cover May to September 2021 and can be claimed from late July 2021.

From May until September, those whose turnover has fallen by more than 30% will get the 80% grant but self-employed individuals whose turnover has fallen by less than 30% will get a 30% grant capped at £2,850.

Combating Fraud

As always, it will be important for employers to make sure that they refer to the latest guidance on the scheme to ensure that they are eligible to access grants and are doing so correctly. Use of the CJRS and SEISS remains subject to HMRC scrutiny, and demonstrating his commitment to tackling fraud, the Chancellor announced the Government’s plan to invest over £100 million in a Taxpayer Protection Taskforce of 1,265 HMRC staff to combat fraud within COVID-19 support packages.

Traineeships and Apprenticeships

At the end of January, the Government announced that employers who created new traineeship opportunities were eligible for a cash payment of £1,000 for each trainee, up to a maximum of 10 trainees. This scheme allows employers to claim the incentive for any work placements that have been completed between 1 September 2020 and 31 July 2021. The Chancellor has now announced an additional £126 million will be provided to extend this to the 2021/22 academic year.

The Chancellor has also increased the payments made to employers taking on new apprentices. Employers who hire a new apprentice between 1 April 2021 and 30 September 2021 will receive £3,000 per new hire rather than the previous £2,000 for those under 25 or £1,500 for those over 25.

In addition to this, the Chancellor announced a “new innovative flexi apprenticeship programme” committing £7 million to developing a portable apprenticeship programme in England, that will allow people to work for a number of different employers in the same sector.

Additional Announcements

  • The Government confirmed its plan to increase corporation tax to 25% for companies with profits of over £250,000 in 2023. Businesses with profits of £50,000 or less will be unaffected remaining at the 19% rate and those with profits in between £50,000 and £250,000 will see a tapered increase.
  • Reforms to the immigration system will help ambitious UK businesses attract the brightest and best international talent in science, research and technology, as well as new improved visa processes for scale-ups and entrepreneurs. The government has also promised to “radically” simplify the application process for high skilled visas.
  • Extension into the 2021/22 tax year of the temporary income tax and NICs exemption for expenses reimbursed by an employer to an employee for equipment purchased for the sole purpose of working from home due to COVID-19.
  • The £20-a-week universal credit uplift will be extended for a further six months.
  • The Government will continue with the 100% business rates holiday through to the end of June. For the remaining nine months of the year, business rates will be discounted by two thirds, up to a value of £2m for closed businesses.
  • Small and medium enterprises will be able to register for digital or management training through a government scheme “Help to Grow”.
    • “Help to Grow: Management” will offer MBA style management training provided through executive development programmes in partnership with business schools (with the government providing 90% of costs).
    • “Help to Grow: Digital” will help businesses develop digital skills with free expert training and a 50% contribution towards new productivity-enhancing software

Working Parents

Meanwhile the reopening of schools yesterday will have given a much needed lift to working parents who have juggled work commitments with home schooling. It will also be a positive step for employers who can hope to see normal working patterns and productivity levels resume where they have been patient and flexible with their employees.

Employers should continue to expect some need for flexibility as staff adjust to their new working pattern around the school-run, and of course keep in mind that localised closures may still occur where Covid cases are identified within school bubbles.

Emma Gross
Partner – Employment, Data Protection
Emma Gross is a Partner Solicitor at Spencer West. She specialises in Complex employment tribunal cases, data protection and the GDPR, negotiating settlements and advising on fair and reasonable redundancy procedures.