PIXIE PAYROLL Blog
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 – 31st 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 31st 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.
Every year, our December blog is a look back on the year but for 2020, it’s hard to know where to start. We don’t think we’ll ever forget this one.
The year started off quite normally really, but it wasn’t long before news stories about the virus started to become more prominent and that it was starting to spread around the world. I don’t think any of us still had any idea about what was in store until, of course, we all went into lockdown in March.
There is no doubt the year has been challenging for us as we have helped our clients deal with all the changes and navigate their way through the government schemes. The complexity of the situation has meant we have actually taken on quite a few new clients and we’re grateful to those who have turned to us for help this year.
Some of our clients have continued without interruption throughout the year and so we have been running their payroll as normal. But even ‘normal’ means dealing with the challenges of having employees working from home or helping those who have had to self-isolate.
Many of our clients have had some or all of their employees on furlough and this has been especially tricky to deal with. We have worked so hard to help them manage the scheme and keep up with the changes, some with very short notice such as the extension of the scheme and increased wage rates at the end of October. We have made sure we’ve been available to answer any questions employers or employees might have had and there’s no doubt that our Chartered Institute of Payroll Professionals membership has been invaluable this year and it has meant we’ve always had an accurate and timely source of information and analysis as government announcements have been made.
This week, the BBC reported ONS figures that showed that UK-wide, there were 370,000 redundancies in the three months to October – a record number and with sadly the hospitality sector being the hardest hit. Even though we are Tier 1 and so hospitality venues can remain open, there’s no doubt the closures earlier in the year have had an impact and it has been a distressing part of our job this year to have to help employers manage the effects of redundancy through their payroll. We’ve also been managing Statutory Sick Pay for those employees who did contract the virus or who have had to self-isolate.
So, what do we think 2021 will look like? It’s definitely exciting that the vaccine is here and is starting to be administered but as the NHS will give priority to older people, it will be a while before younger, working age people are vaccinated. Which means the virus will continue to have an impact on us all for a bit longer, as demonstrated by the fact that Chancellor has just extended the furlough scheme for another month until April 2021 and the new Tier 4 level and Christmas restrictions that were announced on Saturday. And we will be social distancing, wearing masks and washing our hands for a good while yet.
For Pixie Payroll, it means that, at least for the first few months, we’ll continue to support all our clients through these difficult times and take some of the stress away by managing all aspects of their payroll efficiently and accurately. But hopefully by the time Christmas 2021 comes around, things will feel a little more like normal.
But in the meantime, we’d like to wish you all a very Merry Christmas and a hopeful and happy New Year.
It’s hard to believe it’s the end of November already and that this difficult year is nearly coming to an end. Since we wrote our last blog, there have been more changes to the Coronavirus rules and regulations, with details on the new post-lockdown tier arrangements in England and Christmas restrictions having been announced only this week.
The most profound change was England going back into a lockdown situation on 5th November. We now know that this lockdown will be lifted on 2nd December but at the time it was introduced, it wasn’t at all clear that this would happen.
After the lockdown, Cornwall will be one of the few places in the UK to go into Tier 1 which allows us a bit more freedom in terms of meeting up with people in our homes (although the rule of 6 still applies) and pubs, bars & restaurants being able to open for table service, which we’re sure will be good news for our hospitality clients.
All tier restrictions will be relaxed for 5 days over Christmas with up to 3 households being allowed to gather to celebrate the holiday together.
Furlough and self-employed scheme extensions
Early in November, an extension to the furlough and self-employed scheme was announced but with the new lockdown a few days later, this was extended further. The Coronavirus Job Retention Scheme is now planned to run until the end of March 2021 (although it will be reviewed in January 2021) and will pay 80% of an employee’s salary, just like it did at the beginning of the first lockdown in March this year.
Similarly, the Self-Employed Income Support Scheme will run until March 2021 and will pay 80% of average profits.
These extensions are a significant change from what was originally planned for the current and following months; in fact it was only on 1st November that a one month extension was announced which was then superseded by the news a few days later. All of this means things have been changing really quickly and it can be hard for employers to keep up.
Tax relief for working from home
Employees who have been working from home since the start of the pandemic may have found that has generated additional costs. From extra tea, coffee and water to higher bills for heating and lighting, especially as we are coming into the colder and darker months, unexpected expenses can be tricky.
Employees are able to claim tax relief of £6 per week or £26 per month provided they haven’t already been reimbursed by their employer. Claims can be made via the government website here and the employee’s tax code is then amended so they will pay less tax on their earnings.
As well as having to deal with the pandemic, employers and businesses may also be planning for the current Brexit transition arrangements coming to an end on 1st January 2021. So if you employ people who are EU nationals or you send employees to work in the EU, it is important you make plans for the new rules.
All the current information can be found here but it is important to keep checking as things are still changing.
As we say every month, if you have any questions about your payroll or need help navigating the rules and regulations, just get in touch. If you’ve been persevering with managing your payroll yourself this year but now really think you could do with some help, speak to us. We manage all sizes of payroll and can help for as long or as short as you need us to.
We’ve reached the end of October and I think many of us were hoping things would be getting a bit more back to normal by now. But in fact, it feels like things are changing more quickly and dramatically than they did in the spring as the full impact of the pandemic is revealed.
New Job Support Scheme and Tier 2 grants
At the end of the summer, the Chancellor announced that the Coronavirus Job Retention Scheme would be replaced by the Job Support Scheme which was designed to work in an environment where businesses were reopening, restrictions lifting and things getting back to normal. However, as we have seen over the last few weeks, that is now not the case and some areas of the country are going back into tight restrictions to deal with rising infection rates.
So on Thursday, he announced some changes to the scheme, making it more generous for businesses in areas under the newly introduced Tier 2 and 3 restrictions.
Businesses in Tier 3 areas which are forced to close will now have 66.67% their employees’ pay covered and with no expectation that employers make any contribution.
For businesses in Tier 2 and Tier 1, an employee will only need to work 20% of their normal hours (and be paid for those hours in the normal way), the employer will cover a further 5% and the government will pay 61.67%.
In addition, hospitality and leisure businesses in Tier 2 – which will not be forced to close but which will be seeing reduced income – will be able to apply for grants of up to £2,100 which will be distributed by their local authority.
Job Retention Bonus
The Job Retention Bonus Scheme was first announced earlier in the summer and allows employers to claim £1,000 for every eligible employee who has been placed on furlough but who remains continuously employed until at least 31st January 2021. The grant is paid to the employer and there is no requirement for them to pass it on to their employee.
The qualifying earning period starts on 6th November so if you want to claim a grant, your employee must be back at work by then.
Self Employed Income Support Scheme
In the summer, the Chancellor also announced a further extension to the SEISS although only 20% of profits would be paid as a grant. This week, that has been increased to 40% so more generous and more in line with the Job Support Scheme. We are awaiting more details on the scheme and it is not yet open for applications.
Things are changing quite quickly at the moment, but our membership of the Chartered Institute of Payroll Professionals means we get notified quickly of any changes and updates to government financial support schemes and other support measures that might be available to businesses during the pandemic. Keep an eye on our Facebook page (we’d love it if you’d like us there too) for all the up to date info.
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