Spring Budget 2020: what do employers need to know?

Spring Budget 2020: what do employers need to know?

Spring Budget 2020: what do employers need to know?

The news headlines following the Spring Budget on Wednesday 11 March 2020 largely focussed on the government’s response to the COVID-19 outbreak, including previously announced changes to the statutory sick pay regime.  There were, however, a number of other key developments delivered in the Spring Budget of which employers should be aware. 


Government’s response to coronavirus situation

Emergency legislation will temporarily extend entitlement to Statutory Sick Pay (SSP) to employees who are not unfit to work but who have been advised to self-isolate in accordance with government guidelines.  Employees will also be entitled to SSP if they are unable to work because they are caring for those who are exhibiting symptoms of coronavirus and have been advised to self-isolate.  Entitlement to SSP will be paid from the first day of absence (with the usual waiting period temporarily suspended).

The government advises employers to use their discretion not to require a GP fit note for coronavirus-related absences.  A temporary alternative to the fit note will be introduced, which employees will be able to obtain via NHS111, with the objective being to reduce pressure on GP surgeries.

To support small and medium sized businesses, the government will refund up to two weeks’ SSP costs claimed per employee as a result of coronavirus.  Employers with fewer than 250 employees as at 28 February 2020 will be eligible to claim this refund. 

The emergency legislation will be in the form of the awaited COVID-19 Bill, which is expected to go before Parliament the week commencing 16 March.

Increasing National Living Wage

This April, the National Living Wage (NLW) is due to increase by 6.2% to £8.72ph.  From April 2021, the NLW will apply to workers aged 23 and over.  In the Spring Budget, the government has set itself a new target for the NLW to reach two thirds of median earnings and to be extended to workers aged 21 and over by 2021.  Not surprisingly, the government has made this self-imposed target subject to economic conditions. 

New entitlement to Neonatal Leave

The government will create a new entitlement of up to 12 weeks’ paid leave for employees whose babies spend an extended period of time in neonatal care, so that parents do not need to choose between returning to work and taking care of their vulnerable newborn.  It is not known how this new type of statutory leave will interplay with entitlement to other family leave and pay, such as maternity and paternity leave.

Carers’ Leave

The government is to consult on the design of a new form of statutory leave for employees with unpaid caring responsibilities.  The Budget was silent on whether this kind of leave will attract statutory pay.

Support for Self-Employed Parents

The government is to consider how to provide “appropriate support” to self-employed parents as part of its review of Parental Leave and Pay.


The government is to review the working of the Apprenticeship Levy and will ensure that sufficient funding is made available to support an increase in the number of new, high-quality apprenticeships in SMEs.

Tax relief for homeworkers

From 6 April 2020, the maximum flat rate income tax deduction available to employees to cover additional household expenses when working from home will increase from £4pw to £6pw.

Substantial increase in Immigration Health Surcharge

The Immigration Health Surcharge paid as part of an immigration application will rise from £400 to £624.  The discounted rate of £470 will be applicable to children under 18, students and those entering the youth mobility scheme.

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