UK Government Budget Update (March 2020)

The UK government had its budget on Wednesday 12 March 2020, which includes additional year end changes, as well as how the Government is going to support employers who are affected by COVID-19.

Here’s a summary of the key things you need to know about to be best prepared.

IR35 Reforms Delayed

Steve Barclay, Secretary of the Treasury, confirmed in parliament on March 17 that the reforms originally planned from April 2, 2020 for the off-payroll working rules, will be delayed for 12 months until April 6, 2021. Read more here>>

Employment Allowance
The employment allowance of £3,000 has been increased to £4,000 from April 2020.

COVID-19
As part of the Budget (outlined below), the government announced measures to support individuals and employers during the COVID-19 outbreak. However, The Statutory Sick Pay (General) (Coronavirus Amendment) Regulations 2020 has been released and it currently only states that those individuals who are required to self-isolate to prevent infection or contamination with coronavirus disease can be paid SSP with effect from 13 March 2020. This is a temporary measure and is due to expire in eight months, on 12 November 2020. The payment of SSP from day one rather than day four is currently not included in the amendment nor is the refund of SSP for businesses with less than 250 staff as at 28 February 2020. Any further updates regarding the amended legislation will be provided as soon as it is released.

Support for Individuals
The government has announced measures to support small to medium sized employers and individuals to cope financially where employees are unable to work because of COVID-19. The measures are:

  • The forthcoming COVID-19 Bill will temporarily allow SSP to be paid from the first day of sickness rather than from the fourth day where:
    • Individuals have been advised to self-isolate or
    • Where people caring for those within the same household who display COVID-19 symptoms and have been told to self-isolate.

Medical Evidence for SSP – caring for others who self-isolate. The government has already issued guidance to employers, advising them to use their discretion not to require a GP fit note for COVID-19 related absences. This Budget announces that the government and the NHS will bring forward a temporary alternative to the fit note in the coming weeks which can be used for the duration of the COVID-19 outbreak. This system will enable people who are advised to self-isolate to obtain a notification via NHS111 which they can use as evidence for absence from work, where necessary.

Support for Employers
The government will support small and medium-sized businesses and employers to cope with the extra costs of paying COVID-19 related SSP by refunding eligible SSP costs. The eligibility criteria for the scheme are as follows:

  • This refund will be limited to two weeks per employee.
  • Employers with fewer than 250 employees will be eligible. The size of an employer will be determined by the number of people they employed as of 28 February 2020.
  • Employers will be able to reclaim expenditure for any employee who has claimed SSP (according to the new eligibility criteria) as a result of COVID-19.
  • Employers should maintain records of staff absences but should not require employees to provide a GP fit note.
  • The eligible period for the scheme will commence from the day on which the regulations extending SSP to self-isolators come into force.
  • 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.

FastTrack will support customers with these changes with the standard Tax Year End processes. If you like to learn more about how you can keep your business compliant with the latest middle office solution, get in touch with us today.

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