PIXIE PAYROLL Blog

There was an important milestone along the path of us coming out of lockdown this week as, on Monday, non-essential retail, hairdressers, gyms, some hospitality and some accommodation providers were able to reopen. There’s been plenty of news coverage of pints being enjoyed outside and queues outside shops, and it really does feel like things are starting to get back to normal.

But there are some more steps to go and so in this month’s blog, we’ll have a look at those and think about actions you might need to take as an employer.

Next step – 17^th May

This is the next big date on the lockdown route map and is when more businesses will be able to reopen as well as some restrictions lifted on our own personal freedoms.

On this date, all pubs, restaurants, hotels, theatres, cinemas will be able to open. These industries clearly employ a lot of people, many of who will have been away from work for many months. Many will have been on furlough so employers will have been planning their return to work early on and perhaps will be organising some refresher training just before reopening.

Some employers might need to recruit new staff for reopening and again, will have been planning this as far in advance as possible. It’s tricky as the opening date isn’t guaranteed (the government might yet change its plans) but they will want to be able to hit the ground running and still have enough time for recruitment and training.

The government’s furlough scheme will still be in operation during this time, so businesses will have options and can be flexible in bringing staff back to work – get in touch if you need help managing your payroll through this transition time.

There’s likely to still be the need for social distancing and mask-wearing so many affected businesses will have been working out how they can open safely whilst having the maximum number of customers in their premises at any one time. Theatres and cinemas will find this especially challenging given they can’t move their furniture around as easily as pubs and restaurants.

The reopening of hotels means that we will be allowed to stay away from home again. The regulations from 17^th May also allow us to stay overnight in another private home which opens up the possibility of family reunions – something many are looking forward to even more than the first pint in the pub!

Final step – 21^st June

This should be our final step out of lockdown when all remaining businesses can reopen and all restrictions on numbers for gatherings are lifted. Although we might consider this the time we get back to ‘normal’, there will still be challenges for employers in terms of staffing, turnover and managing sickness. The furlough scheme continues until the end of September for those employers who need it and it is still likely that some staff who can will want to work from home at least part of the time.

The flipside of that is that some employers will need to boost their team numbers quite quickly in order to cope with a busy summer – here in Cornwall many tourism businesses are expecting to be very busy as people still may not be able to travel abroad for their holidays.

Just as we have done for the last 12 months during the pandemic, we can take away the headache of managing your payroll. This includes adding new staff and producing contracts (now a legal requirement from day 1), managing furlough, dealing with statutory sick pay and even preparing the paperwork for leavers. We can even make paying HMRC easier with Modulr, which could save you bank charges.

Get in touch for a chat if the time has come for you to get help with your payroll.

As I begin writing this, the Chancellor of the Exchequer Rishi Sunak has just taken his seat again after delivering his budget statement. Although he has looked forward to a time when coronavirus restrictions will be lifted, he is also clearly planning for a few more months of disruption caused by the pandemic.

Extension of the furlough scheme

Perhaps the most important announcement from a work and payroll point of view is the extension of the Coronavirus Job Retention Scheme, otherwise known as the furlough scheme. The scheme was due to come to an end at the end of April 2021, but it will now run until the end of September 2021.

Employees will still receive 80% of their salary for the hours they can’t work due to the pandemic but in July, employers will be asked to contribute 10% and in August and September they will be asked for 20%.

More grants for the self-employed

The Self-Employed Income Support Scheme will also be extended until September with two further grants confirmed. Newly self-employed who submitted a tax return for the 2019/2020 year will now be able to apply for a grant. The 4^th grant covers the period of February to April and will pay 80% of average profits but the 5^th grant will depend on how much income has been lost. If it is more than 30% of profits, then 80% can be claimed but if less than 30% has been lost then only 30% of average profits will be paid.

National Living Wage

As we have previously mentioned, the Chancellor confirmed the National Living Wage will increase from April 2021 and because the age threshold is lowering, more people will qualify for the higher rate of £8.91p.h.

Other business support

The Chancellor also announced a number of other initiatives to support business and jobs as companies reopen and the economy begins to recover.

Restart Grants will be available from April with non-essential retail businesses able to apply for up to £6,000 and hospitality and leisure businesses who will be reopening later will receive up to £18,000. Additional recovery loans will also be available.

The Business Rate holiday is extended until the end of June when a ²/₃ discount will be applied until the end of the year.

The reduced VAT rate of 5% for hospitality businesses will remain in place until the end of September and will then increase to 12.5% for six months; not returning to the full 20% rate until April 2022.

Income tax

Although there won’t be an increase in tax and NI rates, the Chancellor did announce that both the personal allowance and higher rate threshold will be frozen from next year until 2026. This does mean that people will pay more tax in future years that they would have done if the allowances were allowed to increase.

If you need any help with any of the budget announcements – especially around how the extension of the furlough scheme will affect your payroll or if you think the time has come to ask someone to look after your payroll for you – then just get in touch and we can help.

As I write this, there is a definite feel of spring in the air, with the sun shining and daffodils popping up everywhere. That would normally be enough for me to feel a bit more optimistic about the months ahead but this year, there are even more reasons to feel hopeful for the future.

The Covid-19 vaccination programme is going so well (thank you all you wonderful NHS people!) that the government has announced a new target of all over 50s being offered their first jab by the 15^th April and the whole adult population having at least their first dose by the end of July.

And the Prime Minister has now announced his 4 step plan for lifting lockdown restrictions in England, re-opening businesses and bringing employees back to work.

For employers and employees, there’s no real change to the current situation until 12^th April when non-essential shops, hairdressers, pub beer gardens, theme parks and zoos, gyms and self-catering holiday accommodation can reopen. Slightly larger weddings will be allowed from this date too, although the numbers are still restricted to 15 people. This is exciting news for many businesses including many of my clients, as it means the summer season can get underway although the date does fall a week after the Easter weekend which will disappoint some in the tourism industry here in Cornwall.

The next key date is 17^th May when hotels, pubs, cinemas and theatres can reopen. Sporting events can go ahead, with up to 10,000 people allowed in large sporting arenas such as football stadiums. Groups of up to 30 people will be able to mix outdoors and the limit for funerals, weddings, wedding receptions and wakes will also increase to 30.

The final step is on 21^st June when all remaining sectors of the economy can reopen and number limits on social gatherings of all types will be lifted. With a few exceptions, this will be us almost getting back to normal.

Employers should prepare early

Whilst it is possible these dates will change if the data isn’t going in the right direction, it is still a good idea for employers to prepare early for reopening, especially if they have staff on furlough.

For those who will be able to reopen in April and May, think about when you might bring furloughed staff back to work and also identify if you have any gaps in your staffing and advertise early to be sure of filling the vacancies. We can help manage the transition from furlough to work and also add new employees to your payroll, so everything is ready for opening day.

There were no announcements today about extending government support beyond the current end date of the furlough scheme of April 2021 so we will keep an eye on any news from the Chancellor.

Almost a year since we first went into lockdown, and assuming the data is reporting good news, it really does look like we can begin to be optimistic about returning to normal, seeing family & friends and getting back to work.

This is our first blog post of 2021 so first of all, we’d like to wish everyone a happy new year. It’s been a tricky start to the year with us all going into lockdown again, many businesses being forced to close and children back to being home-schooled. Let’s hope the vaccine roll-out means better times are ahead.

There haven’t been any major Coronavirus-related government announcements so far this month, so we thought we’d have a look at some other employment-related updates this time, although inevitably some pandemic updates will feature too.

Self-assessment tax returns

The deadline for self-assessment tax returns is this Sunday – 31^st January – so there’s not much time left to get things sorted. However, HMRC has just announced that providing tax returns are filed by the end of February, they won’t apply penalties. They are still expecting any tax to be paid by 31^st January and they will be applying interest to late payments so if you can, it’s still worth getting it all done by Sunday.

HMRC have encouraged people to file their returns even if they can’t pay the tax they owe as they have set up some instalment schemes to help.

Minimum wage rates increase this April

Some good news is that, as with most years, the National Living Wage (NLW) and National Minimum Wage (NMW) rates are increasing this April. In addition, the NLW threshold will be lowered so that everyone aged 23 years and over will receive this rate (currently it is 25 years and over).

The new NLW rate will be £8.91, an increase of only 19p from the current rates. Percentage increases in NMW rates are smaller still.

We will automatically apply the new rates to all applicable employees in payroll schemes that we manage but if you need help working out what your new wage bill will be after April 2021, just get in touch.

Coronavirus Job Retention Scheme

As we have previously mentioned, the CJRS or furlough scheme has been extended until the end of April 2021 with the government paying 80% of employees’ wages. Staff can be placed on furlough at any time and it can be a useful tool for employers to help employees with childcare responsibilities now the schools are closed again. Those who are shielding can also be put on furlough.

The government are also starting to take steps to prevent fraudulent claims under the scheme; from next month, details of businesses which have claimed under the scheme will be published and individuals will be able to check whether a claim has been made on their behalf.

The extension of the CJRS has meant both the Job Retention Bonus and Job Support Scheme have been postponed for now with further updates expected soon.

Statutory sick pay for those asked to self-isolate

Don’t forget that you should pay SSP to those who can’t work due to them being asked to self-isolate, if they are eligible. This is true even if they are asked to self-isolate multiple times and small & medium sized employers can reclaim up to two weeks of SSP paid per employee for absences related to COVID-19.

There has been some talk in the press over recent days about a plan to pay everyone who has tested positive and so has to self-isolate a lump sum of £500 but that doesn’t seem likely. Currently anyone on a low income who has to self-isolate due to a positive test result does receive the lump sum payment.

If you have any questions about SSP and whether you should be paying it to your employees, just get in touch.

In fact, and as always, if you have any questions at all about your payroll scheme or if one of your new year resolutions has been to find someone to help you manage yours, just get in touch. There will be a few more difficult months ahead yet and we can help by taking one headache off your hands.