Tomorrow, Chancellor Rishi Sunak will reveal the Government’s tax and spending plans in the Budget 2021 announcement. However, with COVID-19 still shaping many business decisions, the ongoing pandemic will shape many of the spending plans being put in place.
So far, the Government has borrowed a record-breaking £270 billion fighting the pandemic and they need to have an action plan in place for how they plan to repay the money spent so far. The cost of the Coronavirus pandemic has hit our nation’s health and finances hard. Yet, it is important that setting out a spending plan that repays those costs should not be done at the cost of workers.
Concerns are high that the Budget 2021 announcement could lead to more COVID-19 redundancies in the UK. Extending the furlough scheme will be one of the main influencing factors on redundancy.
Providing increased financial support for businesses that have been hit hardest by pandemic restrictions will also play a role in whether more redundancies and job losses are expected to come.
So, what can we expect to see in the Budget 2021 announcement tomorrow?
Budget 2021: Job and Worker Support
With unemployment levels at their highest in five years, it is essential that the Government have a support plan in place for workers.
Since February 2020, the number of employees on pay roll has fallen by 726,00 and the UK unemployment rate has risen to 5.1% in December. Research by the Office of National Statistics also estimate the redundancy rate to be 12.3 people per thousand employees.
With so many people on furlough due to the pandemic, many workers are concerned about the future of their job.
Furlough scheme extension
Rishi Sunak has stated that he is “preparing a Budget that provides support for people”. Therefore, it is anticipated that the Job Support Scheme which is due to end in April will be extended until 30th June 2021.
The Job Support Scheme, or furlough scheme, currently pays up to 80% of employee wages, helping businesses to retain staff during these difficult times.
Prolonged Universal Credit uplift
For those who are out of work, it is expected that the £20 per week uplift to Universal Credit will be extended for an additional six months. This will provide prolonged support for those who are out of work during the pandemic.
Unfair Dismissal support
If you are a worker that has been made redundant because of the pandemic, it is important for you to check that you have been fairly chosen for redundancy.
If you believe your employer has ended your employment unfairly, then reach out to our specialist team of Employment Lawyers to see how we can support you.
Budget 2021: Business Support
As we know, the COVID-19 restrictions have had a major impact on many customer-facing businesses. Many business owners could, as a result, be making some important business decisions off the back of the Budget 2021 plans.
Business support schemes
It is proposed that a £5 billion business support scheme will be implemented to help businesses that have been most affected by the pandemic such as shops, pubs, clubs, gyms and hair salons. The business support package is expected to offer businesses under the specified sectors to be able to receive up to £18,000 in grants.
The Business support scheme is also rumoured to include a £150 million Community Ownership Fund to help communities save pubs that are at risk of closure and a £408 million package to support the arts industry with reopening when lockdown restrictions ease.
Other expected business support schemes include a proposed £520 million scheme to help businesses improve their software and training.
Extending the furlough scheme will not only be beneficial to the workers. Business owners and leaders are also on edge to find out whether the furlough scheme will be extended. Without it, they may need to make difficult decisions regarding redundancies and reducing the size of their workforce to ensure they are able to survive.
Despite business owners requesting that tax rates remain the same, Rishi Sunak has hinted that business and personal taxes may need to increase to counteract the money that has been put into fighting the pandemic.
Some people think that corporation tax may increase from the current rate of 19% to 23%. While this still remains below the G7 average, the rate change will still be noticeable for businesses especially those who have been hit hard by the pandemic.
An increase in corporation tax could have a further knock-on effect on the unemployment rate in the UK as businesses may try to counter the increased cost of taxes by making job cuts within the company.
Redundancy support for businesses
If you are a business owner facing the decision of making redundancies, it is important that you follow the correct legal process for redundancies. We can help you with your redundancy process by ensuring that you are following correct legal process.
COVID-19 redundancy support
Whether you are a business making redundancies, or you are a worker who has been made redundant, we can help.
Here at TEN Legal, our experienced Employment Lawyers can offer one-off redundancy advice or a monthly retainer can be agreed for an outsourced legal department.
When making redundancies, it is important that the correct procedure is followed. If it is not followed, then the worker may be able to make a claim against their employer for unfair dismissal. At TEN Legal, we can support both workers and employers with legal cases regarding redundancies.
Contact us for redundancy support and advice.