Jul 2020
21
The End of Earlier Year Updates
From the end of this tax year, an Earlier Year Update (EYU) will no longer be accepted by HMRC as a valid RTI submission to report changes to employees’ pay details for tax year ending 5th April 2021. HMRC had originally planned to abolish the Earlier Year Update for tax year 2019-20 and onwards.
An Additional Full Payment Submission must be submitted instead to report the correct year to date figures for an employee to HMRC.
For tax years up to and including 2017-18, any amendments must be reported to HMRC via an EYU submission only. For 2018-19 and 2019-20, a correction submission can be made using either an Earlier Year Update or an Additional Full Payment Submission to report changes to HMRC.
For tax years 2018-19 and 2019-20, in order to avoid any issues with employers trying to use both options, BrightPay decided to only cater for amendments using the Additional Full Payment Submission option. An Additional Full Payment Submission will report the correct year to date details for employees to HMRC, rather than amendments that the Earlier Year Update would report.
To make corrections in BrightPay, you need to re-open the payslips for the employee in BrightPay, make the necessary changes and finalise the payslips to the last pay period again.
To subsequently create an Additional Full Payment Submission for submission to HMRC, follow our simple instructions here.
Jun 2020
3
Advisory Fuel Rates updated from 1st June 2020
HMRC has issued details regarding the latest Advisory Fuel Rates for company cars. From the 1st June 2020 employers may use the old rates or new rates for one month. Employers are under no obligation to make supplementary payments to reflect the new rates but can do so if they wish. Hybrid cars are treated as either petrol or diesel cars for this purpose for the fuel rates.
The rates are as below:
| Engine size | Petrol - amount per mile | LPG - amount per mile | ||
| 1400cc or less | 10 pence | 6 pence | ||
| 1401cc to 2000cc | 12 pence | 8 pence | ||
| Over 2000cc | 17 pence | 11 pence |
| Engine size | Diesel - amount per mile | |
| 1600cc or less | 8 pence | |
| 1601cc to 2000cc | 9 pence | |
| Over 2000cc | 12 pence |
For fully electric cars the Advisory Electricity Rate is 4 pence per mile. But electricity is not a fuel for car fuel benefit purposes.
Click here to see all details per HMRC
May 2020
19
Claim Guidance for Coronavirus Statutory Sick Pay Claim
HMRC has released further information for employers who are planning to submit a claim under the Coronavirus Statutory Sick Pay Rebate Scheme. HMRC have confirmed that the coronavirus Statutory Sick Pay Rebate Scheme will launch online on 26 May.
Where employers are registered for PAYE Online and they have a Government Gateway User ID, the employer will require this for their claim. If the employer is not enrolled for PAYE Online, they will need to enroll now. If an employer has an agent that is authorised to operate PAYE Online for their client, the agent can claim under this scheme on behalf of the employer.
Employers will need the following for the claim:
- Employer PAYE reference
- Contact name or number
- Bank account details – sort code and account number
- The total amount of Statutory Sick Pay (Coronavirus related) that has been paid to employees in the claim period
- Dates for the Statutory Sick Leave period – start and end dates
- The number of employees being claimed for
The employer must keep records for the statutory sick payments they wish to claim from HMRC, to include:
- The National insurance number for each employee being claimed for
- Start and end dates for the period of sick leave an employee was off sick
- The reason why the employee could not work
- Details of the qualifying dates in the period the employee could not work
Claims for multiple employees and multiple pay periods can be submitted by an employer at the one time. The start date of the claim period will be the earliest pay period the employer is submitting the claim for and the end date of the claim being the most recent pay period on the claim. HMRC has advised that employers must keep the records for the SSP paid and claimed under this scheme for three years after the date they receive the payment from HMRC.
The Statutory Sick Pay (Coronavirus) (Funding of Employers’ Liabilities) Regulations 2020 legislation to provide for eligible employers to reclaim some, or all, of their Statutory Sick Pay has been presented before Parliament to take effect from 26 May 2020.
Regulations have also been laid in Northern Ireland – ‘The Statutory Sick Pay (Coronavirus) (Funding of Employers’ Liabilities) (Northern Ireland) Regulations 2020.’
May 2020
13
Furlough Scheme to be available until 31st of October
Chancellor Rishi Sunak has advised the Coronavirus Job Retention Scheme will be available for employers for furloughed employees until the end of October 2020 and will introduce a new flexibility option under the scheme from August. This will apply to all regions and sectors in the UK economy.
The Coronavirus Job Retention Scheme (CJRS) was introduced for four months from 1st March by the government because of the coronavirus pandemic in order to give financial support to businesses and employees. Under this scheme all employers, regardless of size or business sector, can claim from HMRC a payment for 80% of the wage costs for employees that were furloughed up to a maximum of £2,500 per month per employee. If the employer can afford to top up the additional 20% of the employee’s wages they can pay the employee the additional amount if they wish.
There were suggestions that the furlough amount reclaimable would drop to 60% but it was confirmed the scheme would remain at 80% of the wage costs for employees that were furloughed, up to a maximum of £2,500 per month. An option of flexibility for the CJRS will be introduced in August that furloughed employees will be able to return to work on a part time basis where the employer will be asked to pay a percentage of the employees’ wage costs. This will only be available for employers that are already using the furlough scheme. This new flexibility will help with businesses reopening and help boost the economy. More details will be available by the end of May.
The government intends to explore options for furloughed employees that wish to partake in training or learning new skills in the furlough period and will work in conjunction with the Devolved Administrations to ensure people across the Union are supported.
Chancellor Sunak advised that 7.5 million employees have so far been furloughed by employers, which is approximately 29% of the workforce in the UK. There are 935,000 employers availing of the CJRS and so far over £10 billion has been claimed by employers using this scheme.
COVID-19 & Payroll Webinar
Interested in finding out more about COVID-19 and Payroll? Join BrightPay for our free webinars where we discuss the Coronavirus Job Retention Scheme, Furlough Leave, HMRC’s Claim Portal and COVID-19 Related SSP. Places are limited - click here to book your place now.
Apr 2020
27
Coronavirus Statutory Sick Pay Rebate Scheme Updates
The Coronavirus Statutory Sick Pay Rebate scheme was introduced to repay employers the current amount of Statutory Sick Pay paid to current or former employees on or after 13th March 2020 for periods of sickness. The amount an employer can claim is for up to 2 weeks sick leave for an employee that cannot work due to the following:
- Have coronavirus
- Are self-isolating at home
- Due to public health guidance the employee is shielding
Only the current rate of SSP can be claimed, even if the employer pays the employee more than the current rate of SSP. Employers do not have to have doctor’s fit note from their employees for this claim. An employer’s claim amount cannot be more than the maximum of €800,000 of state aid in accordance with the EU Commission temporary framework. This is when included with other aid obtained under this framework. There is a lower maximum for the aquaculture and fisheries sector of €120,000 and the agriculture sector of €100,000. Unfortunately at present, the online service with HMRC is not available yet in order to claim the COVID-19 Related Statutory Sick Pay. HMRC will announce when this service will be available.
Conditions an employer must meet in order to be eligible to claim under this scheme are:
- An employer has less than 250 employees on 28th February 2020
- An employer has a PAYE scheme that was set up and commenced on or before 28th February 2020
- The employees they are claiming for were on sick leave due to coronavirus
If employers or charities are connected, once they have in total less than 250 employees on or before 28th February, they can avail of this scheme. All employees such as full-time and part-time employees, employees on zero-hour or flexible contracts or employees with agency contracts are covered under this scheme.
The employer must keep records for the statutory sick payments they wish to claim from HMRC such as:
- National insurance number for each employee being claimed for
- Start and end dates for the period of sick leave the employee could not work
- The reason why the employee could not work
- Details of the qualifying dates in the period the employee could not work
Join BrightPay for a free COVID-19 webinar where we discuss what you need to know about remote working, processing SSP, the Coronavirus Job Retention Scheme and placing employees on furlough leave.
Places are limited - Click here to book your place now.
Apr 2020
14
Details of what an Employer needs to Claim for Furlough Employees
HMRC has announced that the online portal or service for employers to make claims relating to the Coronavirus Job Retention Scheme is planned to be launched on 20th April 2020. In order to process the claim employers must have:
- A PAYE scheme that was created and commenced on 28th February 2020
- Enroll for HMRC’s PAYE Online service
- Have a UK bank account
Employers will need the following for the claim:
- Employer PAYE reference
- Self-Assessment Unique Taxpayer Reference or Corporation Tax Unique Taxpayer Reference or Company Registration Number
- Contact name and number
- Bank account details – sort code and account number
- The number of furloughed employees
- Names for all furloughed employees
- National Insurance numbers for all furloughed employees
- Payroll or works numbers for all furloughed employees
- Dates for the furloughed period – start and end date
- Amount for the claim (per the minimum length of furloughing of 3 consecutive weeks)
An employee that was furloughed has to be on furlough leave for a minimum of 3 weeks in a row in order to be eligible under the reclaim scheme. Employees may have been placed on furlough leave multiple times but each period has to be a minimum of 3 weeks in a row.
The amount the employer is coming to claim from HMRC must be calculated by the employer. They may use records from their payroll software to help ascertain the amount of the claim. Where employees were already placed on furlough leave claims can be backdated until 1st March. Authorised agents that have the capacity to act on behalf of their clients for PAYE matters will be able to claim on behalf of their clients. But agents with permission to file only and payroll bureaus will not have the ability to access this service on behalf of their clients. But file only agents may have to assist their clients in order to be able to make the claim and are being encouraged by HMRC to help where they can.
HMRC will check each claim made for each employer and if the employer fulfils the criteria for the scheme then payment will be made by HMRC into the UK bank account by BACs transfer. HMRC reserves the right to audit any employers’ claim under this scheme.
Apr 2020
9
Online HMRC Service for Reclaiming Wages under Coronavirus Job Retention Scheme
HMRC has announced that the online portal or service for employers to make claims relating to the Coronavirus Job Retention Scheme is planned to be launched on 20 th April 2020. HMRC have advised that employers will only be able to register their claims online and no claim can be made by telephone. This claim is for employers that have furloughed their employees and can make a claim for 80% of furloughed employees’ pay up to a maximum of £2,500 per month per employee.
The Coronavirus Job Retention Scheme (CJRS) is a scheme the government introduced because of the corona virus pandemic in order to give financial support to businesses and employees. Under this scheme all employers, regardless of size or business sector, can claim from HMRC a payment for 80% of the wage costs for employees that were furloughed up to a maximum of £2,500 per month per employee. If the employer can afford to top up the additional 20% of the employee’s wages they can pay the employee the additional amount if they wish.
It has been advised that in order to claim employers will require a National Insurance number for each employee that was furloughed and salary details including National Insurance and pension contribution details for employers to calculate the amount they can claim under this scheme.
Authorised agents that have the capacity to act on behalf of their clients for PAYE matters will be able to claim on behalf of their clients. But agents with permission to file only and payroll bureaus will not have the ability to access this service on behalf of their clients. But file only agents may have to assist their clients in order to be able to make the claim and are being encouraged by HMRC to help where they can.
HMRC have advised that employers will be contacted with information and steps to follow on what the employer needs to do around the time that the service is planned to be launched. HMRC are hoping that the first claims will be made within a number of weeks.
Mar 2020
20
Changes to the Employment Allowance for 2020-21
From 6th April 2020 the eligibility rules for an employer claiming the Employment Allowance will change. Employers will have to check if they meet the correct criteria in order to check if they are eligible to claim the allowance. Some of the eligibility rules are as follows:
- An employer can only claim the Employment Allowance for the tax year if their total (secondary) Class 1 National Insurance contributions is below the threshold of £100,000 in the previous tax year.
- An employer cannot claim the allowance for deemed payments of employment income, as they are not included in the total cost of up to £100,000 for employers’ (secondary) Class 1 National Insurance contributions.
- In the tax year before you claim if there is more than one payroll or connected companies the employer will need to add the total liabilities for employers’ (secondary) Class 1 National Insurance contributions for all payrolls or companies and only if the total liability is under £100,000 can one payroll or company claim the Employment Allowance.
- An employer will have to check they will not exceed the de minimis state aid threshold, if applicable, as the Employment Allowance will be included as this type of aid. De minimis state aid rules apply to an employer if their business engages in providing goods or services to the market.
In Budget 2020 it was announced that the Employment Allowance will increase from £3,000 to £4,000 from 6th April 2020 thus helping to reduce the employers’ (secondary) Class 1 National Insurance contributions liabilities.
In the tax years before 2020-21 the Employment Allowance claim auto-renewed, as in the employer did not have to make separate claims every tax year. But this is changing from 6th April 2020 onwards. The method of claiming through the Employer Payment Summary remains the same but the employer will have to make a new claim for the Employment Allowance to HMRC each tax year.
Mar 2020
16
New Redundancy Changes from 6th April 2020
The new legislation of The Employment Rights (Increase of Limits) Order 2020 was laid to Parliament on 3rd March 2020 and the changes will come into force on 6th April 2020.
In this legislation the maximum amount weekly pay for redundancy payment calculations will increase by £13 from £525 to £538 from 6th April. This law applies to England, Scotland and Wales.
Currently, where an ex gratia payment is made on termination of employment (on top of notice pay), the first £30,000 can be paid free of income tax and any amount above this is taxable. However, the entire payment is currently exempt from national insurance contributions. From 6 April 2020, the first £30,000 of any ex gratia termination payment (including any redundancy payment) will still be free of income tax and national insurance but any amount above this will be subject to Class 1A employer national insurance contributions.
Employees that are employed by their employer for two years or more are normally entitled to statutory redundancy payments. The age of the person can determine the monetary amount they received based on the following:
- An employee under 22 years of age receives 50% of a week’s pay for each full year of employment
- An employee aged under 41 and above 21 will receive 1 week’s pay for each full year of employment
- An employee that is 41 and older will receive 1.5 week’s pay for each full year of employment
In England, Scotland and Wales the maximum an employee can be awarded for statutory redundancy is £15,750 and £16,410 in Northern Ireland. Statutory redundancy payments are capped at 20 years length of services.
In England, Scotland and Wales the maximum an employee can be awarded for compensation for unfair dismissal has increased by £2,075 to £88,519 from 6th April onwards.
An increase of £1 for the employment protection daily rate amount will apply to England, Scotland and Wales from the start of 2020-21. The new daily rate is £30.
At present there are no details of changes to the statutory maximum weekly amount or the employment protection daily rate amount for Northern Ireland. The maximum rate operating in 2019-20 was £547 per week and £29 respectively.
Mar 2020
13
Budget 2020 – An Employer Focus
Chancellor of the Exchequer Rishi Sunak presented Budget 2020 to Parliament on 11th March 2020. The main points to be noted by employers are:
- The personal tax allowance will remain the same at £12,500 for the new tax year 2020-21.
- There are no changes to the PAYE tax thresholds from 6th April 2020.
- The National Insurance threshold will increase by £868, from £8,632 to £9,500 for 2020-21.
- The Employment Allowance has increased to £4,000 from £3,000 for eligible employers.
- From April 2020 the government will restrict the Employment Allowance to employers with an employer National Insurance contributions (NICs) bill below £100,000 in the previous tax year.
- Employees aged 25 and over will receive the National Living Wage of £8.72 an hour and it was announced that it is planned that the National Living Wage (NLW) will increase by two thirds by 2024 that will equate to £10.50 per hour.
- In relation to the Coronavirus, as previously announced by the Prime Minister Statutory Sick Pay (SSP) will be paid from the first day of sick leave rather than day four and the government will refund Statutory Sick Pay for 14 days to employers with less than 250 employees.
- A temporary Coronavirus Business Interruption Loan Scheme will be available for businesses from the government to help pay employees’ wages and business costs.
