Budget 2021 – what does it mean for employers?

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    Disclaimer: This article is based on legislation which was correct at time of publishing on March 6, 2021

    Employers are largely unaffected by the Budget changes, beyond the extension of the Furlough scheme through to September, which is covered separately. 

    The emphasis of this Budget was on encouraging recruitment, with additional funding for apprenticeships and training.  The grants for taking on apprentices range from £1,000 to £3,000, depending on the age of the worker.

    A new portable apprenticeship is introduced from July with a view to enable workers to learn across multiple employments.  This seems to be a work in progress as suggestions from stakeholder employers are being sought.

    Statutory Sick Pay

    The rebate scheme for workers on sick leave as a result of covid is to continue for the foreseeable future.   This applies to small and medium sized employers.

    Working from home

    The tax exemption for employers providing equipment to enable employees to work from home is being extended.  This is available where the equipment is a requirement to enable the worker to do their job and will apply whether the employer meets the cost directly or reimburses the employee.  Employees who do not receive reimbursement for costs that they have incurred in relation to equipment are not able to deduct that cost from their income for tax purposes.

    Van benefits

    The provision of a zero emissions van will no longer attract a benefit in kind for an employee that is permitted to use the vehicle privately from April 2021.  We are awaiting guidance as to whether this applies to vans purchased prior to April 2021, or is only for vans purchased after this tax year.

    Cycle to Work

    The Cycle to work scheme has been around for 20 years now.  It is not perhaps the most exciting of initiatives, since it will only be relevant in some very narrow scenarios, but it is nevertheless a valuable scheme for those that use it.  The requirement that the majority of travel on the bike is business related has been relaxed temporarily until April 2022 for those who were in the scheme at December 2020.

    Covid tests

    Exemption for the cost of an employee getting a test is extended, so that employers can reimburse the cost of the test, without giving rise to a benefit in kind.  This relief has been backdated, which will be a welcome move for many.  However, it only applies to the antigen test, which looks at whether the employee currently has the virus.  The relief does not apply to the test for antibodies.  Employees who are not reimbursed the cost of the test will not be able to claim a deduction from income for tax purposes.

    Back to the Budget 2021 Overview

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