Budget 2021 – An Employer Focus
Chancellor of the Exchequer Rishi Sunak presented Budget 2021 to Parliament today 3rd March 2021.
The main points to be noted by employers are:
- The personal tax allowance will increase from £12,500 to £12,570 for the new tax year 2021-22 and the plan is to keep it at this level until 2026.
- The higher rate income tax threshold will increase by £270 to £50,270 from 6th April 2021 and will be frozen until April 2026.
- The NIC primary threshold will increase by £68, from £9,500 to £9,568 for 2021-22.
- The Coronavirus Job Retention Scheme is to be extended until the end of September 2021 with the government to continue paying 80% of employees' wages for hours they cannot work. Employers will be asked to contribute 10% for July and 20% for August and September.
- The grant for new apprenticeships made available by employers in England to be extended to September 2021 and the amount increased to £3,000.
- Traineeships to get a £126 million boost to fund 40,000 more places.
- The Employment Allowance remains at £4,000 and will apply to eligible employers whose Secondary Class 1 National Insurance Contributions liability is under £100,000 a year.
- From 1st April 2021, the National Living Wage of £8.91 per hour will now be paid to employees aged 23 years and over instead of the previous age threshold of 25 years and older.
- The Vat rate for the hospitality sector will remain at 5% until 30th September 2021. This will increase to 12.5% until 31st March 2022, with the 20% rate resuming from April 2022.
- £5 billion in new Restart Grants for businesses announced – £6,000 for non-essential outlets that are due to re-open in April and for hospitality, accommodation, leisure, gym and personal care businesses, a one-off cash grant of up to £18,000.