COMPLIANCE
Budget 2021
The CIPP’s policy and research team provides a summary of the announcements
T he 2021 Spring Budget was the pandemic has had a detrimental impact on the economy and on jobs, things were not as bad as initially anticipated. Indeed, the Office for Budget Responsibility (OBR) confirmed that the economic growth towards the end of delivered on 3 March, with the chancellor explaining that though 2020 was stronger than initially predicted: although output was 6.3% lower than in February 2020, this was approximately 1% higher than expected. Additionally, the unemployment rate, which will reach its highest level in the fourth quarter of 2021, will equate to 6.5% but this is 1% below the figure OBR estimated in November 2020. There were numerous announcements made in the Budget, all of which will have impacts on various sectors and areas of society and life. Of key interest to the CIPP was, of course, any news that will directly influence the work of payroll professionals. A summary of the main points for the profession to be aware of has been collated below. In closing his speech, the chancellor stated how the spring 2021 Budget had been tailored to meet the requirements of the current social and economic circumstances. Extension of the CJRS Rumours had been circulating for months that the coronavirus job retention scheme (CJRS) would be extended once again, to support employers and their workers through the pandemic. This seemed to
be confirmed when prime minister Boris Johnson unveiled the ‘roadmap’ out of lockdown, revealing that several restrictions would have to remain in place until mid- to-late June 2021, at the very earliest. ...government support will remain unchanged
furlough. Commencing 1 July 2021, the level of government support will begin to taper. For July, the government will subsidise 70% of an individual’s normal pay up to a cap of £2,187.50 per month; and employers will be required to contribute 10%. For August and September 2021, the level of support will reduce to 60%, capped at £1,875 per month; and at this point, it will be mandatory for employers to pay 20% of the worker’s usual pay. CJRS guidance (http://ow.ly/ CMXy30rzOg5) was updated to confirm that for claim periods from 1 May 2021 onwards, eligibility for the scheme would be widened. From that point, claims can be submitted for any employees who were employed as of 2 March 2021, who had been included in a pay as you earn (PAYE) real time information (RTI) submission to HM Revenue & Customs (HMRC) between 20 March 2020 and 2 March 2021. There is no requirement to have claimed for an employee prior to 2 March 2021 for claim periods commencing on or after 1 May 2021. For the claim periods of March and April 2021, however, the previous rules still apply, so individuals must have been on payroll and included in a RTI submission between 20 March 2020 and 30 October 2020 in order to be eligible. At the CIPP, we are aware that the next big activity for HMRC will be related to ensuring compliance with the CJRS, and the other measures implemented during the pandemic. Payroll professionals are reminded to check that claim
at 80% of an individual’s
The CJRS has been extended until the end of September 2021, and the level of government support will remain unchanged at 80% of an individual’s standard pay, for any usual hours not worked, until 30 June 2021, capped at a limit of £2,500 per month. Employers will still be required to pay staff for any hours that they work at their contractually agreed rate, and the associated liabilities, as well as employer’s National Insurance contributions (NICs) and minimum auto- enrolment (AE) pension contributions for any hours that an employee spends on standard pay, for any usual hours not worked, until 30 June 2021, capped at a limit of £2,500 per month.
| Professional in Payroll, Pensions and Reward | April 2021 | Issue 69 28
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