Key measures affecting employers that are included in Budget 2021 are as follows:

Off-Payroll Working rules

From 6 April 2021:

  • Finance Bill 2021 will amend the unintentional widening of the corporate 'intermediary' definition. The equivalent change will also be made to the National Insurance contributions regulations.
  • The requirement to provide information as to whether the qualifying conditions are met for the Off-Payroll Working rules is extended from the deemed employer to also include the worker and the intermediary.
  • The consequences of providing fraudulent information in relation to the rules are extended to anyone UK-based party in the labour supply chain.
  • A Targeted Anti-Avoidance Rule (TAAR) aims to catch arrangements circumventing the intermediary conditions and taking the engagement out of the rules in order to gain a tax advantage.


  • An extension of the £1,000 payment per trainee for employers providing work experience for trainees aged 16-24 years old for 2021/2022.

Statutory Sick Pay (SSP)

  • The SSP Rebate Scheme will be extended until the end of September.
  • Employers with fewer than 250 employees will continue to be able to reclaim up to two weeks of SSP costs per employee from the government.
  • Eligible sickness absence includes COVID-19 illness, self-isolation or shielding. 

Enterprise Management Incentive (EMI)

  • Finance Bill 2021 will extend the exception to the working hours requirement, where employees cannot meet the requirements due to COVID-19. This is available to existing and new EMI participants. It will have effect until 5 April 2022.
  • A call for evidence for the Enterprise Management Incentives scheme. This will form part of a consultation that will consider if, and so, how to expand the current scheme in order to support high-growth business.

Statutory parental bereavement payments (SPBP)

  • SPBP have been added to the list of payments not considered to end transitional arrangements, put in place in 2017, surrounding long-term salary sacrifice arrangements.
    • The tax advantages of these arrangements will be in place until April 2021 under the transitional rules.
    • The SPBP was introduced in April 2020 and was not included in the list of disregarded payments drawn up in 2017.
    • The legislation will be retrospective.

COVID-19 antigen tests

  • An exemption will be retrospectively introduced for employer-reimbursed COVID-19 antigen tests for 2020-21.
    • The corresponding exemption for National Insurance Contributions is already in force.
    • Both exemptions will be extended to 2021/2022.

Employer-provided bicycles

  • A time-limited easement applies the rules surrounding the employer-provided bicycles exemption. 

Termination payments

  • Changes to treatment of termination payments and post-employment notice pay that have already been published have been confirmed as unchanged for the Finance Bill 2021.
    • Where the employee's post-employment notice period is defined in a different quantity to that of the employee's pay period (e.g. a pay period measured in months and a notice period measured in days), the changes ensure that the calculation of pay is consistent.
    • Termination pay over £30,000 will be subject to employer's NICs.


  • The COVID-19 home working exemption to Income Tax & NICs where the employer reimburses home office equipment expenditure will be extended until 5 April 2022.

Car and Van fuel benefits

  • From 6 April 2021:
    • Van benefit: £3,500.
    • Car fuel benefit, the multiplier will be £24,600.
    • Flat-rate van fuel charge, £669.

Useful guides on this topic

Budget 2021: At a glance
A summary of key budget announcements together with items published without announcement.

Budget 2021: Subscriber guide
A detailed guide with links to more detail on all the key topics for SMEs and their owners.

EMI: Enterprise Management Incentives: at a glanceThe Enterprise Management Incentive (EMI) scheme is a tax incentivised employee reward scheme which uses share options. 

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