To our extra Mid-November’s Tax Tips & MYOB News.
So it is another difficult time for businesses as we are plunged into another lockdown. Having just got our heads around the new Job Support Scheme this has now been postponed and the Furlough Scheme has been extended.
The lockdown is set to continue until 2nd December at which point the Tier system may come back in force. It is possible that the lockdown may be extended for longer. It is also possible that restrictions may be relaxed slightly over Christmas.
We continue to work as normal. So please just or give us a ring on 01422 847500 if you would like to check what support is available for your business.
|Covid-19: Furlough Scheme extended
|Since the Chancellor’s statement on 22 October 2020 detailing the Job Support Scheme (JSS), the Government have now changed their minds and reinstated the Coronavirus Job Retention Scheme (CJRS) or ‘Furlough Scheme’.
The Furlough Scheme which was due to end on 31 October 2020 has now been extended to 31 March 2021 with a planned review in January. The CJRS is there to support individuals and businesses who are impacted by disruption caused by coronavirus (COVID-19) this winter.
Details of how to apply for the Extended Furlough scheme have now been reflected in the guidance on the Gov.uk Website.
- As before, employees must not carry out any work for the employer during their time on furlough. However a director can furlough and continue with their ‘statutory duties’.
- The government will pay 80% of wages for a furloughed employee up to a monthly cap of £2,500. Employers will have to fund all employer National Insurance and employer pension contributions.
- Example: a worker on £37,500 pa gets a monthly wage of £3,125 normally. If they are on furlough they get 80% of this – £2,500. Employers will have to fund all employer National Insurance (£17pm) and employer pension contributions (£60 pm at 3% or £159 pm at 8%).
- The scheme is set to continue to March 31st 2021 but the 80% funding level of the grant will be reviewed in January.
- Businesses can furlough employees full-time or keep them at work part-time (‘flexible furlough’). This flexibility allows employers to consider the most advantageous options for their businesses.
- Neither the employer nor the employee needs to have previously used the CJRS. However employees must already have been on an employer’s RTI payroll return by 30th October 2020.
- Claims must be submitted within 14 days after the end of the claim month.
- Calculations of the grant are broadly the same as previous months, calculated by reference to usual hours worked in a claim period.
- Employers will need to report hours worked and the usual hours an employee would be expected to work in a claim period.
- You may compel your employees to consider a part of their furlough as annual leave. If you want to do this you do have to write to employees to explain. Annual leave on furlough has to be paid at the full (topped-up) rate based on their current pay rate and is separated on the payslips as ‘furlough leave’.
- Employers are still able to choose to top up employee wages above the scheme grant (to 100%) at their own expense if they wish.
- The Job Support Scheme will be introduced following the end of the CJRS.
- You must have a written agreement with the employee for them to go on furlough. Paying 80% of an employee’s normal wage is a contractual change that requires agreement in writing. If this hasn’t already been agreed (eg for a newly furloughed worker) we can draft an agreement letter for you.
Please for more information about the furlough scheme – and to find out how it can help support your business.
|Other Changes to Support for Businesses
|Payroll Notes for November
|The Job Retention Bonus Scrapped
The Job Retention Bonus (JRB) of £1000 per furloughed employee will not now be paid in February 2021. However HMRC promise that a retention incentive will be offered at the appropriate time.
Self Employment Grant Increased
Support through the Self-Employment Income Support Scheme (SEISS) will be increased. The , third grant covering November to January will now be calculated at 80% of average trading profits, up to a maximum of £7,500. Details of the part four grant covering the three-month period from the start of February to the end of April will follow.
Loan Application Deadlines Extended Further
The government is extending the application deadline for loan schemes – that is, the Bounce Back Loan Scheme, Coronavirus Business Interruption Loan Scheme, Future Fund, and Coronavirus Large Business Interruption Loan Scheme – to the end of January 2021 (from 30 November).
Since April 6th, employers have been allowed to pay workers up to £6 a week tax-free for additional household costs for working at home on a regular basis, either for all or part of the week. This includes if they have to work from home because of coronavirus (COVID-19) and can be backdated to April. Employers can pay this directly to employees as they would other claimable expenses.
Alternatively Employees can reclaim the equivalent tax relief themselves by using the new HMRC portal. This works out as 20% of £6, that is £1.20 for each week working at home.
Note: this is not available for staff on furlough who should not be working at all on their furlough days!
|Issuing of P30s (Employer Payslips)
For larger employers who pay their PAYE every month we are changing the timing of issuing P30s (employer payslips). P30s will no longer be sent to clients with their monthly summary reports. Instead they will be issued to clients separately after the RTI for the month has been filed. This will always be before 5th of the month and will allow plenty of time to pay HMRC before their deadline.
The reason for this change is that we often receive repeated last minute corrections to payrolls (particularly at this time of furloughed staff). Recently we have also seen the HMRC altering the claim that we make through the RTI submission for the Employment Allowance. Both of these can result in you sending a different amount of PAYE/NI being sent to the HMRC than the amount they are expecting.
We will not change the timing of P30s for smaller quarterly PAYE paying empoloyers – these will still be issued with the relevant payroll summary reports and payslips.
Information for Furlough Claims
The earliest date we can claim your November furloughs will be 16th November. So if you would like to take advantage of this please with details of furloughs in November as soon as possible. Even if you have already be claiming for previous months please confirm the details for November.
Note: Jennifer () is preparing and submitting your furlough claims. Lorraine () will reflect the furloughs in the payslips issued (although figures may differ depending on top-up etc).
We need details for each furloughed employee of:
- Usual pay (we can help with calculation)
- Usual working hours
- Worked hours (if any)
- Furlough leave hours (if any)
- Whether you are topping up furlough pay beyond 80%.
|Simple Accounting Claims almost £400,000 for Clients
We have done a review of the furlough claims we have submitted for our clients up until October.
It has been a busy time for us. We have submitted 108 separate claims for a total of £391,000 for our clients. The HMRC portal does not save details – so each month we have to retype the details of the businesses and individual employees – a total of 443 employee entries so far! For claims where working hours vary we have had to calculate ‘usual pay’ and hours based on averages from the previous tax year versus pay for the same period last year . For some months we have calculated proportions of claimable pension and NICs. We have also had to separate out worked hours and any furlough leave – which are calculated in a different way to normal furlough pay.
Providing Other Support
Despite the loss in turnover for many of those clients who are exposed to the lockdown our own activity couldn’t be higher. As well as the furlough reclaims we have been particularly busy with:
Even the more routine work is growing, among a larger number of clients:
- Explaining the support available to individual clients
- Researching and Issuing frequent eNewsletters with the latest advice
- Helping with VAT and tax planning
- Support for loan applications including Bounceback Loans
- Grants for premises
- Grants for self employed
In 2018 we ran the payrolls for 195 staff and represented businesses turning over £11.0m pa
Despite the recent squeeze on smaller businesses, we currently run payrolls for 198 staff and represent businesses turning over £11.9m pa
No Extra Fees
Most accountants charge extra for submitting furlough claims and other extra work, but we have decided to include the claims as part of our comprehensive service with no extra fee. Some clients have suffered particular losses of turnover: despite our increased workload we have helped some clients with fee reductions.
|Can you Recommend Us?
|Further November key dates
|Do you know any friends or business contacts who are looking for a new accountant?
If so, perhaps you would like to recommend us. We are always happy to take on new clients who have a passion for their business and want to stay in control of their financial figures.
| 16 – Earliest date to submit Furlough claim for November
30 – Latest date to apply for Bounceback loan
19/22 – PAYE/NIC, student loan and CIS deductions due for month to 5/11/2020
| Please contact us if we can help you with these or any other tax or accounts matters.
In addition, if there’s anyone else who you think would benefit from the newsletter, please forward the email to them or ask them to contact us to be added to the newsletter list.
| If you are not already a client and are interested in becoming one, we would love to discuss how we can help and provide you with a competitive quote for our services.
See details of our Business Companion Service.
| Simple Accounting Limited offers a cost effective Business Companion service to business owners who use MYOB, Acclivity, Mamut, Feeagent Central, Wave, Solar Accounts, Quickbooks, Xero or Clearbooks.
‘All clients using these software packages can benefit from our support. Visit our website http://www.simpleaccounting.co.uk for a look at the resource on offer.’
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