Our legal experts review the following key areas of yesterday's budget and how this will affect businesses:
Commenting on the changes to the off-payroll working rules by the Chancellor, DWF's Corporate Tax Partner, Caroline Colliston said:
"The Government has confirmed today that it shall legislate to implement the changes to the off-payroll working rules (aka IR35) from 6 April 2020. This will occur against a back drop of concerns raised by business, representative bodies and professional advisers about the impact on business, the labour supply chain and the confusion and lack of clarity around the terms and operation of the legislation as well as an extensive House of Lords Select Committee review to which I presented evidence last week on behalf of the Law Society of Scotland.
"Business has been promised a soft landing for the new rules but it remains to be seen how valuable this will be or how this will operate. All businesses require to take action quickly to check whether they are within the ambit of the new rules and if so, ensure that they are taking steps to comply with the new rules. Suggested steps include identifying their contingent workforce, ensuring the burden of operating PAYE is shifted down their contractual labour supply chain, reviewing the terms of contracts in their labour supply chain, adopting robust internal procedures and audits to ensure status determination statements are provided and liability is limited as well as considering establishing an employment status disagreement process."
Commenting on the energy announcements by the Chancellor, Darren Walsh, energy partner at DWF, said:
"There are a number of subtle positives announced by the Chancellor in today's Budget in connection with energy and the low carbon economy. It is pleasing to see still further expansion of the Energy Innovation Programme, as this covers a broad cross section of low carbon initiatives, including renewables, smart energy system technologies, nuclear, built environment, etc. There is clear support for a carbon capture and storage power station by 2030 but there remains a lack of clear direction for new nuclear build which, as part of the overall energy mix, is essential in meeting the country's decarbonisation targets by 2050 (or earlier).
"In addition, support for further decarbonisation of the transport system is welcomed with support for additional EV fast-charging infrastructure. There is continued support for domestic and non-domestic RHI schemes."
Commenting on the housing announcements by the Chancellor at the Budget, Lee Pickett, a real estate partner at DWF, said:
“The Government has indicated a willingness to invest heavily in housing and infrastructure required to unlock housing sites and resolve the shortages. It is also backing local authorities and RPs to deliver the majority of affordable housing and no doubt, they will continue to work closely with Homes England to make further inroads to meeting the challenges laid down in the Housing White Paper."
Commenting on the employment-related COVID-19 announcements by the Chancellor, Kirsty Rogers, employment partner at DWF said:
"The 2020 Budget confirms the Prime Minister's announcement that the forthcoming COVID-19 Bill will for the time being allow SSP to be paid from the first day of sickness absence, rather than the fourth day, for those who have COVID-19, or who have to isolate in accordance with government guidance. The Budget also confirms that individuals who are unable to work because they have been advised to self-isolate and individuals who have the responsibility for caring for people in the same household who display COVID-19 symptoms and have been told to self-isolate will also be eligible for Statutory Sick Pay ("SSP"). It is not clear if this covers people who are caring for people who are required to self - isolate but do not have symptoms. It does not appear to. If you are caring for a child who is off school but does not have symptoms, or anyone else who is self - isolating but asymptomatic then SSP would not appear to apply although there is a right to time off for dependants.
"Employers have a duty of care to their workforce and should discourage employees from coming into work when they should be self-isolating. The measures set out by the government assists employees and offer assurances that some form of pay will continue from day one of sickness and in an approved isolation scenario. Employers need to be mindful that an employee receiving less than full pay will be motivated to return to work and to full pay – this poses a risk to the wider workforce. As a priority, continuity plans should be implemented by businesses, from homeworking to travel restrictions – putting the business in the best possible position.
"Additional measures have been set out in the Budget for those ineligible for Statutory Sick Pay. The government has recognised that self-employed individuals need some form of assistance and has set out a number of steps to assist with a "new style" Employment and Support Allowance payable for people directly affected by COVID-19 or self-isolating according to government guidance. These measures are applicable from the first day of sickness, rather than the eighth. This protection is a sensible step in the direction for public health and safety. With the significant growth in the gig economy, protecting this sector is undoubtedly a priority. By way of example, many individuals in the courier industry are currently categorised as self-employed contractors – measures must be taken to ensure these people have access to benefits. Failure to do so will inevitably lead to a risk to public health and safety as contractors may feel they have no option but to work if protection is not available during periods of isolation or sickness.
"As part of a £30 billion coronavirus package, Chancellor Rishi Sunak, has also announced support for small and medium sized employers (250 employees or fewer) by refunding eligible Statutory Sick Pay ("SSP"). Refunds will be limited to two weeks for any employee who has legitimately claimed SSP as a result of COVID-19. This announcement will come as a welcome relief for small and medium sized employers who undoubtedly will experience financial hardship as a result of the virus. The government has set out in the 2020 Budget a clear priority of protecting people's jobs. Whilst protecting the health and safety of the population is undoubtedly the number one priority; keeping the economy stable is also critical. Providing employers with this assistance is undoubtedly a step in the right direction."