Budget 2021 – An Employer Focus

Chancellor of the Exchequer Rishi Sunak presented Budget 2021 to Parliament today 3rd March 2021.

The main points to be noted by employers are:

• The personal tax allowance will increase from £12,500 to £12,570 for the new tax year 2021-22 and the plan is to keep it at this level until 2026.
• The higher rate income tax threshold will increase by £270 to £50,270 from 6th April 2021 and will be frozen until April 2026.
• The NIC primary threshold will increase by £68, from £9,500 to £9,568 for 2021-22.
• The Coronavirus Job Retention Scheme is to be extended until the end of September 2021 with the government to continue paying 80% of employees' wages for hours they cannot work. Employers will be asked to contribute 10% for July and 20% for August and September.
• The grant for new apprenticeships made available by employers in England to be extended to September 2021 and the amount increased to £3,000.
• Traineeships to get a £126 million boost to fund 40,000 more places.
• The Employment Allowance remains at £4,000 and will apply to eligible employers whose Secondary Class 1 National Insurance Contributions liability is under £100,000 a year.
• From 1st April 2021, the National Living Wage of £8.91 per hour will now be paid to employees aged 23 years and over instead of the previous age threshold of 25 years and older.
• The Vat rate for the hospitality sector will remain at 5% until 30th September 2021. This will increase to 12.5% until 31st March 2022, with the 20% rate resuming from April 2022.
• £5 billion in new Restart Grants for businesses announced – £6,000 for non-essential outlets that are due to re-open in April and for hospitality, accommodation, leisure, gym and personal care businesses, a one-off cash grant of up to £18,000.

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• No fines for accidental IR35 errors for the first year
• Payroll in 2021: How your practice can thrive in a post-Covid world

Posted byDebbie ClarkeinHMRC

New Advisory Fuel Rates from 1st March 2021

The latest Advisory Fuel Rates that will come into effect from 1st March 2021 for company cars has been advised by HMRC. Employers may use the old rates for up to one month from the date the new rates apply. 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. For fully electric cars, the Advisory Electricity Rate is 4 pence per mile. However, electricity is not a fuel for car fuel benefit purposes. Click here to see all details per HMRC.

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Posted byDebbie ClarkeinHMRC

How To Process COVID-19 Related SSP in BrightPay 20/21

HMRC have advised that if an employee needs to take time off sick or to self-isolate due to COVID-19, the first 3 waiting days that normally apply for SSP will be disregarded and the employee will be entitled to receive SSP from the first day.

We have programmed BrightPay 20/21 so that there is a new option for ‘COVID-19 Related Sick Leave’ and, by choosing this option, the software will automatically apply any SSP due to the employee from day one. Whereas, if you were to choose the normal SSP, the software will take into account the usual 3 waiting days.

With the Coronavirus Statutory Sick Pay Rebate Scheme, the employer can claim for up to 2 weeks sick leave for an employee that cannot work due to COVID-19, and also those who are self-isolating or shielding, subject to eligibility criteria.

An SSP Claim Report is available in BrightPay to assist users in ascertaining the amounts needed for input into HMRC's Coronavirus SSP Rebate Scheme online service.

A Step By Step Guide To Processing In BrightPay

Processing COVID-19 related Statutory Sick Pay is easy in BrightPay. Here’s a detailed step-by-step guide to help you do it.

Processing COVID-19 Related Sick Leave in BrightPay

1. First, you need to select the employee’s name on the left. Under ‘Statutory Pay’, click ‘Calendar’, and on the calendar, select the date range that the employee is out on sick leave.
2. Click ‘Sick Leave’ from the options on the right of the screen and choose 'COVID-19 Related Sick Leave'. The number of ‘Qualifying Days’ & ‘SSP Days’ will be displayed on the screen, bypassing the usual 3 waiting days.
3. When you close out of the calendar, BrightPay will automatically apply any SSP due to the employee.

It is important to note that if existing payment records have not been recorded in BrightPay or if there is insufficient historical payroll data to determine the employee's average weekly earnings, the automatic calculation may be inaccurate or not possible. In this instance, you can manually override the employee’s average weekly earnings.

BrightPay’s Coronavirus SSP Rebate Scheme Claim Report

As mentioned, BrightPay also has a claim report to assist users in determining the amounts that you can reclaim through the Coronavirus SSP Rebate Scheme. This report can be found within the ‘Employees’ tab in BrightPay.

1. First enter the start and end date of the claim period you are claiming for.
2. On the next screen, select the employees you wish to include in your claim.
3. If your chosen claim period covers some of the 19/20 tax year, enter COVID-19 related SSP amounts that you wish to claim for the previous tax year.
4. On the final screen, a summary of your claim will be displayed. Enter any of the additional information that HMRC require when making a claim. If you wish, you can view the full report, and this can be printed, exported or emailed for your records.

Each claim report generated in the software is stand-alone and no data is saved each time a claim report is run. Therefore, it is your responsibility to ensure that you have exported the report, so that you don’t lose the information.

SSP & Furloughed Employees

Furloughed employees retain their statutory rights, including their right to Statutory Sick Pay, and so furloughed employees who become ill must be paid at least the rate of SSP, subject to them meeting the eligibility criteria. You can claim back from both the Coronavirus Job Retention Scheme and the SSP rebate scheme for the same employee but not for the same period of time.

If an employee becomes sick while furloughed, it is up to the employers to decide whether to move these employees onto Statutory Sick Pay or to keep them on furlough, at their furloughed rate. If the employee is moved onto SSP, employers can no longer claim for the furloughed salary. Whereas, if the employee is kept on the furloughed rate, they remain eligible for the employer to claim for these costs through the furlough scheme.

Free COVID-19 Webinars For Employers

Want to keep up-to-date with the latest updates regarding COVID-19 and businesses? We’re holding regular webinars to share with you all news relating to HMRC updates, what employers need to know and how you can make sure you’re complying with best practices at all times.

Click here to watch our previous webinars on-demand, where we cover everything from important COVID-19 payroll updates to return to work government policies and more.

To receive email notifications letting you know when we’re holding our next webinar, sign-up to our mailing list and ensure you don’t miss out on the latest updates for your business.

Posted bySarah TyrrellinCoronavirusHMRCPayroll

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.

Posted byDebbie ClarkeinHMRC

Advisory Fuel Rates updated from 1st December 2019

HMRC has issued details regarding the latest Advisory Fuel Rates for company cars.

From the 1st December 2019 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:

For fully electric cars the Advisory Electricity Rate is 4 pence per mile. But electricity is not a fuel for car fuel benefit purposes. Please click here to see all details as per HMRC.

Posted byDebbie ClarkeinHMRC

Three day easement for FPS to continue

HMRC have confirmed they are continuing the three day easement for filing of Full Payment Submissions that was introduced in 2015. Employers are required to file their PAYE information to HMRC on or before each payment date, which is the statutory filing date, unless the circumstances set out in the 'sending an FPS after payday guidance' are met. The three day easement is not an extension to the statutory filing date. No late filing penalties will be charged for late filing up to three days after the statutory filing date.

Employers can get a penalty in the following circumstances:

• The Full Payment Submission was late
• Failure to send:
1. Expected number of FPS
2. An Employer Payment Summary when there were no payments made to any employees in a tax month

HMRC had advised they will not charge a penalty if:

• The FPS is late but all reported payments on the FPS are within the three day period of the employees’ pay date. However, employers who consistently are filing their returns for up to three days after the payment date may be contacted by HMRC or considered for a penalty.
• The employer is a new employer and the first FPS is sent within thirty days of paying an employee
• It is the first time the employer has failed to send an RTI on time in the tax year (does not apply to employers with an annual scheme)

Posted byDebbie ClarkeinHMRC

Don’t mess with the minimum wagers or HMRC will make you pay

Back in August, the government made headlines in a name and shame exercise of epic proportions where they published the names of 239 employers who underpaid more than 22,000 employees. These underpayments totaled in excess of £1.44 million. That might not seem like a lot in relation to the sheer amount of employees who were underpaid, but on average it would amount to £65 per employee. That would cover a tv license for a year, a new winter coat, or a cheeky Nando’s. My point is, it’s all relative and it was their hard-earned money. Even worse is that all underpayments happened to people who were on minimum or living wage. An added kick in the teeth!

Well the HMRC agreed! They are cracking down on companies who are underpaying their workers. The back pay identified by the HMRC was for more workers than in any other previous ‘name and shame’ exercise. Not only that but the fines wholloped onto the devious employers totalled an eye-watering £1.97 million, which is ironically, more than the underpayments themselves.

In fact, funding for minimum wage enforcement has doubled since 2015 with the government set to spend £26.3 million in 2018/19. The scheme is now in its fifth year and has identified £10.8 million in underpayments and have fined employers in excess of £8.4 million. So although you might be trying to save a few pennies Ebenezer Scrooge, the ghost of paychecks past will inevitably come back to haunt you.

But what about me? I’m an honest business owner who pays my employees - I feel very attacked right now! Ok, so the 5 main areas identified by HMRC as reasons for national minimum and living wage underpayments as:

• Taking deductions from wages for costs such as uniforms
• Underpaying apprentices
• Failing to pay travel time
• Misusing the accommodation offset
• Using the wrong time periods to calculate pay

So as you can see, besides underpaying apprentices, the majority of payroll deductions are as a result of money being offsetted from employees’ wages. Now, this could be on a purpose, pre-calculated or if you will pardon the pun or by penny pinching grinches. OR more so, (and the latter is most likely) you’ve gone and messed up the bloody deductions!

Let me tell you where you’re going wrong. Many employers are not using a payroll software system to do all these mind-boggling calculations for you. And that’s just the payroll calculations. It can get even more complicated for employers using Basic PAYE tools as this tool does not calculate the workplace pension contributions. Instead, this is a manual process.

Yes that’s right, there is software that can do these calculations for us now and even provide payslips to employees (yes, it’s the law to provide payslips to employees). Using a dedicated employer payroll software means that all of those pesky deductions are calculated and processed for your employees by a machine that is much smarter than you. It means a massive reduction in error, no underpayments and most importantly no fines from HMRC and your company name included on the Wall of Shame.

The best payroll software out there right now (as voted by the public) is BrightPay. I could talk about all the benefits that it would bring to your company and life in general but instead read for yourself what its customers have got to say about it on BrightPay’s Customer Testimonials page. You can also book a free demo at https://www.brightpay.co.uk/pages/book-BrightPay-Demo/.

Trust me, you won’t regret it! 

Written by Aoibheann Byrne | BrightPay Payroll Software

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Posted byAoibheann ByrneinHMRC

Renewal of Tax Credits Deadline 31st July

The deadline of 31st July is fast approaching for employees renewing tax credits. Payments will be stopped if tax credits are not renewed by this deadline. HMRC are asking employers to encourage their employees to renew their claim for tax credits as soon as possible and to use the online method.

An employee can renew their tax credits online using their mobile device, tablet or computer. They can also renew on HMRC’s App. Renewing online is easy and is less time consuming, an employee can do this once they have received their renewal pack.

Employees need to report any changes in their circumstances that they have not previously reported to HMRC, for example, changes to working hours, income etc. HMRC has a specialist support team through the tax credits helpline that employees can contact if they cannot renew online.

Employers can help encourage their employees to renew their tax credits by:

• Asking their employees to check their renewal packs and ensure all data is correct and up to date and renewing online
• Ensuring all the employees payment details and personal details through payroll have been reported to HMRC by Real Time Information
• Employers could include a note on the employees' payslips from April to July mentioning renewing tax credits and the deadline date
• If there is a business/company newsletter, it could include a section on renewing tax credits and the deadline date.
  
  

Posted byDebbie ClarkeinHMRC

Autumn Budget 2017 - Employer Focus

The main points to be noted by employers from Autumn Budget 2017, as announced by Chancellor of the Exchequer, Philip Hammond are:

• The personal tax allowance will increase by £350 from £11,500 to £11,850 from 6th April 2018. This is in line with the government's goal to have the personal tax allowance at £12,500 by 2020.
• The higher rate tax threshold will increase to £46,350 from £45,000.
• As previously announced, there has been a delay by one year on the series of changes for NICs to be implemented. These changes will now take effect from April 2019. They include the reforms to the NIC treatment of termination payments, abolition of Class 2 NICs and changes to NICs treatment of sporting testimonials.
• The planned increase in Class 4 NICs from 9% to 10% in April 2018 and to 11% in April 2019 by the government will no longer be happening.
• There is an increase in the Company Car Tax (CCT) diesel supplement to 4% from 3%. The supplement will apply to diesel cars registered on or after 1st January 1998 that are not certified to the Real Driving Emissions 2 standard. It will not apply to diesel hybrids or other vehicles except cars.
• From 6th April 2018 there will be no Benefit in Kind charge on electricity that employers provide to charge employees’ electric vehicles.
• The Government has announced its intention to consult on the extension to the private sector of the IR35 reforms, introduced in the public sector earlier this year.
• There is an increase of the lifetime allowance for pension savings, rising to £1,030,000 for 2018-19.
• The National Minimum Wage details for 1st April 2018 were published.
• HMRC's compliance team are monitoring employers that are claiming the Employment Allowance, as it has been reported that some employers are using avoidance schemes to avoid paying National Insurance amounts due.

Related Articles

• Changes to Making Payments to HMRC
• 42 Year Low in UK Unemployment

Posted byDebbie ClarkeinEventsHMRC

Changes to Making Payments to HMRC

A few changes have been made on methods of making payments to HMRC:

• The option of using Transcash service at the Post Office to pay HMRC will be withdrawn from December 2017
• From 13th January 2018, payments to HMRC with a personal credit card will no longer be accepted

HMRC would encourage all their customers to use the following methods to make payments:

• By direct debit
• By business debit card online or by telephone
• By online or telephone banking

These methods are more secure and can save the customer time and the expense of going to the Post Office or Bank.

Related Articles

• Why using HMRC’s free payroll software, Basic Paye Tools, can cost you time and money.

Posted byDebbie ClarkeinHMRC