The national Living Wage (NLW) will increase in April 2021 to £8.91 per hour for those aged 23 or over (a rise of £0.19 compared to this year’s rate). This is less than usual due to the current economic climate, however it’s still welcomed by many employees and workers aged between 23 and 24, some of whom will receive a pay increase of nearly 9%.
National Living Wage % Increase
2020 vs 2021 £8.72 to £8.91 2.2%
21-22 Year Old Rate £8.20 to £8.36 2.0%
18-20 Year Old Rate £6.45 to £6.56 1.7%
16-17 Year Old Rate £4.55 to £4.62 1.5%
Apprentice Rate £4.15 to £4.30 3.6%
Accommodation Offset £8.20 to £8.36 2.0%
Changes to IR35
These changes were due to commence in April last year. However, due to the Covid-19 pandemic, they were delayed. These changes will be implemented for medium and large businesses in the private sector. Under the new regime, for all contracts entered into with, or payments made to, workers engaged through an intermediary on or after 6 April 2021, the onus will shift to the end user client to make a determination of the worker’s status for tax purposes. Responsibility for accounting for tax and national insurance will shift to the party who pays for the services.
Modern slavery statements
The government is creating an online platform (set to launch early 2021), for businesses and public bodies to publish their modern slavery statement and report on any modern slavery risks within their operations and supply chains. The aim of the platform is to enhance transparency and ensure employers are complying with the law.
The furlough Scheme – further extensions?
Extended until the end April 2021, the scheme allows employers to place employees on furlough leave and claim 80% of their usual monthly pay up to £2,500. The government confirmed that it will review the scheme in early 2021 to determine whether employers will be required to contribute to part of the furloughed employee’s pay. Many expect a further extension to the furlough scheme when the Chancellor unveils his Budget on March 3rd 2021.