The Chancellor of the Exchequer, Rishi Sunak, has moved to reassure business owners by announcing a range of measures to support employers in his inaugural Budget.
Amid the uncertainty surrounding the coronavirus epidemic and with the dawn of a new financial year approaching, Mr Sunak’s hour-long Budget speech in the House of Commons sought to underpin the UK’s business community over the coming months and to provide reassurances on long-term investment.
Sick Pay measures for coronavirus
The Chancellor announced that the UK Government will cover the cost of Statutory Sick Pay (SSP) for businesses with fewer than 250 employees impacted by COVID-19. Businesses will be able to claim a refund for the full 14-day period for employees affected by the virus. Mr Sunak also confirmed that the measures would also cover those employees requested to self-isolate despite not exhibiting coronavirus symptoms.
This follows a previous announcement that SSP will be paid from the first day of absence due to coronavirus.
While existing systems are not designed to facilitate such employer refunds for SSP, the Government will work with employers over the coming months to set up a repayment mechanism for employers as soon as possible.
Employment Allowance increases
Since April 2014, most employers have been able to claim up to £3,000 off their annual secondary Class 1 National Insurance Contributions (NICs) bill.
As widely expected, the Chancellor has increased the Employment Allowance by a third, raising the threshold to £4,000, giving almost half-a-million businesses a much-needed tax cut.
National Living Wage set to increase
The Chancellor confirmed ahead of his Budget 2020 speech that the National Living Wage (NLW) will rise next month, requiring businesses to hand two million workers an instant pay rise.
The NLW rate for over 25s will increase from £8.21 to £8.72 an hour – a 6.2% rise. There was also a firm commitment to increase the NLW rate for over 25s to £10.50 an hour by the end of this parliament.
Younger workers will also experience a boost to their hourly pay next month, with 21 to 24-year-olds experiencing a 6.5% rise from £7.70 to £8.20 an hour. Meanwhile those aged 18-20 will see their pay grow from £6.15 to £6.45 an hour.
For a full round-up of all the announcements and changes affecting your business from Budget 2020 speech, read our comprehensive Budget 2020 round-up here.