Summer Statement - employment implications

The Chancellor's Summer Statement included a number of measures employers need to be aware of.

Job Retention Bonus

The Chancellor confirmed that the furlough scheme will end on 31 October 2020 for all employers. Around 9.4 million workers have been furloughed and, to try and avoid mass redundancies the government will offer a cash incentive to organisations that retain furloughed staff once the scheme ends.

A Job Retention Bonus of £1000 per employee is payable to the employer for every employee that:

• has been furloughed at any time between 1 March and 31 October and for any length of time
• is continuously employed until the end of January 2021
• has earned at least £520 per month from 1 November to the end of January

It's doubtful that this scheme will persuade employers who would otherwise make redundancies to hold off doing so for a few months. But, it will be a windfall for those employers who intend to bring the majority of their workforce back now the lockdown restrictions have eased.

Kickstart scheme

The Chancellor announced the creation of the 'Kickstart' Scheme aimed at providing ‘high quality jobs for young people’ who are at the highest risk of long-term unemployment following the coronavirus pandemic. 

The scheme promises to create thousands of high-quality work placements lasting six months and will be targeted towards 16-24 year olds on Universal Credit as they are considered to be at the highest risk of long-term unemployment. 

Funding for each job will cover 100% of the relevant National Minimum Wage for 25 hours a week, plus employer National Insurance contributions and minimum automatic enrolment contributions.

Apprenticeships and trainees

From 1 August to 31 January 2021, employers in England will receive £2,000 per new apprentice they hire who is under the age of 25 and £1,500 for each new apprentice hired who is aged 25 and over. This is an addition to other current payments given by the government such as the £1,000 payment  for new 16–18 year old apprentices and those under 25 years old with an Education, Health and Care Plan.

Regarding trainees, the government has said it will make an additional £111m this year to support trainees in England for 16–24 year olds. Additionally, as with apprenticeships, employers who provide trainees with work experience will be provided with £1,000 per trainee. 

The government has also announced that it will be enhancing provision and eligibility for traineeships to those with level three qualifications and below.

Tax status of coronavirus tests

The government will not now treat tests provided by employers to their staff, outside of the government’s national testing scheme, as benefits in kind. The Government is legislating for this through regulations, and guidance will be updated shortly.

Need more information?

The government is expected to provide more details on some of these measures. In the meantime, the Plan For Jobs policy paper which was published on 8 July sets out an outline which you may find helpful. 

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