Skip to main content


Barry Stanton


Jessica Clough Banner Image

Jessica Clough


In this week’s people in focus Jessica Clough and Barry Stanton reflect on the Chancellor’s latest Budget proposals and what they mean for employers as the country starts to move out of lockdown.

Extension of the Furlough scheme

One of the key points for employers was the announcement that the furlough scheme would be extended to 30 September 2021.

2021 budget and employers

1. Cut off period changed

Previously employers were only able to use the Job Retention Scheme (JRS) in respect of employees who were already on their payroll by the cut-off date of 30 October 2020. Unfortunately that will remain the case for those placed onto the JRS up until 31 April 2021. However, for those placed onto the JRS on or after 1 May 2021, the cut-off date will be adjusted to include those employees who were on the payroll by 2 March 2021, as long as a PAYE Real Time Information submission was made to the HMRC in respect to that employee between 20 March 2020 and 2 March 2021.

2. Tapering the JRS

The government has announced that it will begin tapering the amount of wages that an employer is able to reclaim under the JRS, as follows:

  • Until 30 June 2021 the government will continue to pay 80% of wages for the hours which the furloughed employee does not work, up to a cap of £2,500 per month.
  • 1 July - 31 July 2021 the government will pay 70% of wages for the hours the employee is does not work, up to a cap of £2,187.50 per month. Employers will be required to contribute 10% of wages, making up the total of 80% of the employee’s wages (up to a cap of £2,500 per month). 
  • 1 August – 30 September 2021 the government will pay 60% of wages for the hours the employee does not work, up to a cap of £1,875 per month. Employers will be required to contribute 20% of wages, making up the total of 80% of the employee’s wages (up to a cap of £2,500 per month)

Throughout all these periods the employer will need to continue making Employer National Insurance Contributions and Pension contributions in respect of their furloughed employees. Flexi-furlough remains allowed.

Technical changes to the new IR35 Off-Payroll working rules from 6 April 2021

It is clear from the Budget that the changes to the IR35 legislation (sometimes referred to as the Off-Payroll Rules) will come into force on 6 April 2021 as planned. In addition, some further technical changes will be made to the way in which the legislation operates. These are as follows:

1. Change to the definition of “Intermediary”

IR35 only applies where the worker is working through an “Intermediary”. This was previously defined as a company in which the worker had a material interest, being an interest in 5% or more of the share value. A “personal services company” (a company owned and managed by the worker) is the most common form of intermediary. However, this definition has now been amended so that an Intermediary will include a company in which the worker has any interest and from which the worker expects to receive a payment that will not be wholly treated as employment income.

This change ensures that: (i) workers can’t dilute their shareholding in their intermediary to avoid application of rules; and (ii) other companies such as umbrella companies who are legitimately operating PAYE for workers will not be caught by the rules.

2. Provision of information by parties in the labour supply chain

Both the worker AND the company through which the worker is operating (for instance their PSC) will be responsible for informing the Fee Payer (the organisation responsible for paying the workers fees) whether the worker’s company is an “Intermediary”, and therefore one to which the new rules apply. This will make it easier for parties in a contractual chain to identify whether the new rules need to be considered by the client organisation.

3. Crack down on fraudulent information

The government will also amend a provision relating to fraudulent information. The change will allow HMRC to take action against any UK-based party in the labour supply chain providing fraudulent information. This will prevent client organisations or deemed employers from facing liabilities where they have relied on fraudulent information provided by another party in the labour supply chain. Where fraudulent information is provided, the subsequent liability will be moved to the party that provided the fraudulent information.

4. Tackling Anti-Avoidance

A Targeted Anti-Avoidance Rule (TAAR) will be introduced. This will target any arrangements where the main purpose, or one of the main purposes, is to gain a tax advantage by circumventing the conditions of an Intermediary and taking the engagement out of scope of the off-payroll working rules. This could include, for example, deliberately structuring an arrangement using a “Scope of Works” so that it looks like a contracted-out service, and therefore outside of the new rules.

Immigration changes

The budget is not normally somewhere that Global Mobility professionals look to for policy reform, however a number of changes were announced in the budget. The key ones are as follows:

  • Introduction of an elite point’s based visa by March 2022. Within this visa there will be a “scale up” stream, enabling those with a job offer from a recognised UK scale-up to qualify for a fast-track visa. Special treatment for “scale-up” companies (the evolved form of a “start-up”) appears to be specifically focused at the Fintech industry, and follows the recommendations made in the Kalifa review, published less than a week before the budget.
  • Reform the Global Talent visa (formerly Tier 1 - Global talent), to make the application process easier, including allowing holders of international prizes and winners of scholarships and programmes for early promise to qualify automatically.
  • Review the Innovator visa to make it easier for those with the skills and experience to found an innovative business to obtain a visa 
  • Launch the new Global Business Mobility visa by spring 2022 for overseas businesses to establish a presence or transfer staff to the UK (which sounds rather like an evolution of the old Representative of an Overseas Business visa)
  • Provide practical support to small firms that are using the visa system for the first time (we await further details on this!)
  • Modernise the sponsorship system to make it easier to use. The government will publish a delivery roadmap in summer 2021.
  • Expand the Global Entrepreneur Programme, marketing the UK’s visa offering and explore building an overseas talent network.

The majority of the changes announced in the budget will not go live until Spring 2022, so we will have to wait for the government to publish the detail on these changes over the course of the year.

The current immigration system has not had any major upgrades since it went live in 2008 and the Home Office has historically been very slow to adopt new ways of working, however the announcements in the budget appear to show that there is a renewed focus on modernising the infrastructure of the immigration system and making it easier to use. If done correctly it will make it significantly easier for Sponsor Licence holders to ensure they are compliant, and will reduce the requirement for specialist intervention for administrative tasks such as reporting a change in a worker’s job title.

The government appears to be increasing its support for the Fintech sector, possibly indicating they are prepared to take a more sector based approach in helping develop high potential industries or supporting those that need a helping hand to remain competitive.

There is certainly a great deal more work required to make the UK the leading destination for global talent, however the budget announcement are certainly a step in the right direction and should be welcomed by all areas of the economy.

If you would like advice, support or training on any of the areas covered by this article, please contact the Employment and Immigration team at [email protected] or phone us on 0118 9527284.

Consistent with our policy when giving comment and advice on a non-specific basis, we cannot assume legal responsibility for the accuracy of any particular statement. In the case of specific problems we recommend that professional advice be sought.


Get in touch

If you would like help with any of the matters mentioned on this page please do not hesitate to contact us.

View All
shutterstock 531975229 (1)

Stay ahead with the latest from Boyes Turner

Sign up to receive the latest news on areas of interest to you. We can tailor the information we send to you.

Sign up to our newsletter
shutterstock 531975229 (1)