8th March 2021

Three takeaway points from The Budget 2021 from an employment perspective

On 3 March 2021, Chancellor Rishi Sunak delivered the highly anticipated Budget announcement in Parliament. Now, it may come as no surprise to you that the main focus of this year’s Budget was the economic recovery from the pandemic. In his speech, Mr Sunak made some key employment announcements, three of which I will discuss further – the extension of the furlough scheme, the Living Wage increase and the new support for self-employed workers.

One of the most welcomed, and some may say predictable, announcements made by the Chancellor was the extension of the furlough scheme. This was set to close at the end of April but has now been extended until the end of September. As before, employees placed on the furlough scheme will be paid 80% of their current salary for hours that they are unable to work. However, employers are now expected to contribute 10% towards their employees’ wages for hours not worked in July. This contribution will increase to 20% for the months of August and September.

The National Living Wage has been increased to £8.91 per hour, legally payable by employers from 1 April 2021. This change has been particularly welcomed by those aged 23-24, who will, for the first time, be included in the age bracket for eligibility. The National Minimum Wage will also rise from 1 April 2021, and will be a different amount depending on the employee’s age.

Finally, the Chancellor announced further assistance for self-employed workers, with two further grants being made available until the end of September. These will represent the fourth and fifth grants payable through the Coronavirus Self Employed Income Support Scheme (SEISS).

The fourth grant will cover February through to the end of April 2021, will amount to a maximum of 80% trading profits averaged over three months. This will be worth up to £7,500. The fifth grant will cover the period from May until the end of September, with the difference being that the amount paid will depend on loss of income. Self-employed workers who experience a loss in turnover by a minimum of 30% will be eligible to apply for the grant. This will amount to a maximum of 80% of profits, with the value being no more than £7,500. Those self-employed workers who have seen a reduction in income of less than 30% will be entitled to a 30% grant, the maximum amount of which will be £2,850. Self-employed workers can apply for the fourth grant from next month and for the fifth grant from July.

Although the Budget has made provision to support workers through this increasingly difficult time, it will be interesting to see how the situation develops in the weeks and months to come.

If you need any advice surrounding the Chancellor’s announcements, please get in touch with Blackadders’ Employment Team working in Aberdeen, Dundee, Edinburgh, Glasgow, Perth and across Scotland.

Blythe Petrie, Trainee Solicitor
Employment Law

Blackadders LLP



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