PIXIE PAYROLL Blog

An update on the Chancellor’s Self Employment Income Support Scheme

As I write this, the Chancellor Rishi Sunak is still speaking so we think some of the details will need to be clarified but he has just announced the long-awaited details of his support for the self-employed during this coronavirus crisis.

Anyone who submitted a self-employed tax return for the 2018/2019 tax year and whose trading profits were less than £50,000 will be able to claim a taxable grant of 80% of their average monthly profits over the last three years up to a maximum of £2,500. They must have made a majority of their income from self-employment and following a question from the press, if someone hasn’t been self-employed for that long, the figure will be calculated based on profits for however long they have been trading.

Anyone who has become self-employed recently so didn’t submit a 2018/2019 tax return aren’t going to be included in the scheme and so will have to reply on the measures around Universal Credit as previously announced. Anyone who should have submitted a return before the deadline in January now have four weeks to get their return in to be included in the scheme.

Self- employed people are allowed to continue doing business as well as being able to claim. HMRC will be getting in touch will all those who are eligible, and payments are anticipated in June, backdated to now, so they will get a lump sum payment in a few months time.

As always, please get in touch if you have any questions but do bear with us as we are dealing with lots of queries from employers putting employees on furlough as well as individuals not sure what to do in the current situation.

COVID-19 Update

Support for businesses through the Coronavirus Job Retention Scheme

Under the Coronavirus Job Retention Scheme, all UK employers will be able to access support to continue paying part of their employees’ salary for those employees that would otherwise have been laid off during this crisis.

Eligibility

All UK businesses are eligible.

How to access the scheme

You will need to:

  • designate affected employees as ‘furloughed workers,’ and notify your employees of this change – changing the status of employees remains subject to existing employment law and, depending on the employment contract, may be subject to negotiation
  • submit information to HMRC about the employees that have been furloughed and their earnings through a new online portal (HMRC will set out further details on the information required)

HMRC will reimburse 80% of furloughed workers wage costs, up to a cap of £2,500 per month. HMRC are working urgently to set up a system for reimbursement. Existing systems are not set up to facilitate payments to employers.

If your business needs short term cash flow support, you may be eligible for a Coronavirus Business Interruption Loan.

Support for businesses through deferring VAT and Income Tax payments

We will support businesses by deferring Valued Added Tax (VAT) payments for 3 months. If you’re self-employed, Income Tax payments due in July 2020 under the Self-Assessment system will be deferred to January 2021.

VAT

For VAT, the deferral will apply from 20 March 2020 until 30 June 2020.

Eligibility

All UK businesses are eligible.

How to access the scheme

This is an automatic offer with no applications required. Businesses will not need to make a VAT payment during this period. Taxpayers will be given until the end of the 2020 to 2021 tax year to pay any liabilities that have accumulated during the deferral period. VAT refunds and reclaims will be paid by the government as normal.

Income Tax

For Income Tax Self-Assessment, payments due on the 31 July 2020 will be deferred until the 31 January 2021.

Eligibility

If you are self-employed you are eligible.

How to access the scheme

This is an automatic offer with no applications required.

No penalties or interest for late payment will be charged in the deferral period.

HMRC have also scaled up their Time to Pay offer to all firms and individuals who are in temporary financial distress as a result of Covid-19 and have outstanding tax liabilities.

Support for businesses who are paying sick pay to employees

We will bring forward legislation to allow small-and medium-sized businesses and employers to reclaim Statutory Sick Pay (SSP) paid for sickness absence due to COVID-19. The eligibility criteria for the scheme will be as follows:

  • this refund will cover up to 2 weeks’ SSP per eligible employee who has been off work because of COVID-19
  • employers with fewer than 250 employees will be eligible – the size of an employer will be determined by the number of people they employed as of 28 February 2020
  • employers will be able to reclaim expenditure for any employee who has claimed SSP (according to the new eligibility criteria) as a result of COVID-19
  • employers should maintain records of staff absences and payments of SSP, but employees will not need to provide a GP fit note. If evidence is required by an employer, those with symptoms of coronavirus can get an isolation note from NHS 111 online and those who live with someone that has symptoms can get a note from the NHS website
  • eligible period for the scheme will commence the day after the regulations on the extension of SSP to those staying at home comes into force
  • the government will work with employers over the coming months to set up the repayment mechanism for employers as soon as possible

Eligibility

You are eligible for the scheme if:

  • your business is UK based
  • your business is a small or medium-sized and employs fewer than 250 employees as of 28 February 2020

How to access the scheme

A rebate scheme is being developed. Further details will be provided in due course once the legalisation has passed.

Support for retail, hospitality and leisure businesses that pay business rates

Business rates holiday for retail, hospitality and leisure businesses

We will introduce a business rates holiday for retail, hospitality and leisure businesses in England for the 2020 to 2021 tax year.

Businesses that received the retail discount in the 2019 to 2020 tax year will be rebilled by their local authority as soon as possible.

Eligibility

You are eligible for the business rates holiday if:

  • your business is based in England
  • your business is in the retail, hospitality and/or leisure sector

Properties that will benefit from the relief will be occupied hereditaments that are wholly or mainly being used:

  • as shops, restaurants, cafes, drinking establishments, cinemas and live music venues
  • for assembly and leisure
  • as hotels, guest & boarding premises and self-catering accommodation

How to access the scheme

There is no action for you. This will apply to your next council tax bill in April 2020. However, local authorities may have to reissue your bill automatically to exclude the business rate charge. They will do this as soon as possible.

You can estimate the business rate charge you will no longer have to pay this year using the business rates calculator.

Further guidance for local authorities is available in the expanded retail discount guidance.

Cash grants for retail, hospitality and leisure businesses

The Retail and Hospitality Grant Scheme provides businesses in the retail, hospitality and leisure sectors with a cash grant of up to £25,000 per property.

For businesses in these sectors with a rateable value of under £15,000, they will receive a grant of £10,000.

For businesses in these sectors with a rateable value of between £15,000 and £51,000, they will receive a grant of £25,000.

Eligibility

You are eligible for the grant if:

  • your business is based in England
  • your business is in the retail, hospitality and/or leisure sector

Properties that will benefit from the relief will be occupied hereditaments that are wholly or mainly being used:

  • as shops, restaurants, cafes, drinking establishments, cinemas and live music venues
  • for assembly and leisure
  • as hotels, guest and boarding premises and self-catering accommodation

How to access the scheme

You do not need to do anything. Your local authority will write to you if you are eligible for this grant.

Guidance for local authorities on the scheme will be provided shortly.

Any enquiries on eligibility for, or provision of, the reliefs and grants should be directed to the relevant local authority.

Find your local authority.

Support for nursery businesses that pay business rates

We will introduce a business rates holiday for nurseries in England for the 2020 to 2021 tax year.

Eligibility

You are eligible for the business rates holiday if:

  • your business is based in England

Properties that will benefit from the relief will be hereditaments:

  • occupied by providers on Ofsted’s Early Years Register
  • wholly or mainly used for the provision of the Early Years Foundation Stage

How to access the scheme

There is no action for you. This will apply to your next council tax bill in April 2020. However, local authorities may have to reissue your bill to exclude the business rate charge. They will do this as soon as possible.

You can estimate the business rate charge you will no longer have to pay this year using the business rates calculator.

Further guidance for local authorities is available in the nursery discount guidance.

Support for businesses that pay little or no business rates

The government will provide additional Small Business Grant Scheme funding for local authorities to support small businesses that already pay little or no business rates because of small business rate relief (SBBR), rural rate relief (RRR) and tapered relief. This will provide a one-off grant of £10,000 to eligible businesses to help meet their ongoing business costs.

Eligibility

You are eligible if:

  • your business is based in England
  • you are a small business and already receive SBBR and/or RRR
  • you are a business that occupies property

How to access the scheme

You do not need to do anything. Your local authority will write to you if you are eligible for this grant.

Guidance for local authorities on the scheme will be provided shortly.

Any enquiries on eligibility for, or provision of, the reliefs and grants should be directed to the relevant local authority.

Find your local authority.

Support for businesses through the Coronavirus Business Interruption Loan Scheme

The new Coronavirus Business Interruption Loan Scheme supports SMEs with access to working capital (including loans, overdrafts, invoice finance and asset finance) of up to £5 million in value and for up to 6 years.

The government will pay to cover the first 12 months of interest payments and any lender-levied fees, so smaller businesses will not face any upfront costs and will benefit from lower initial repayments.

The government will provide lenders with a guarantee of 80% on each loan (subject to a per-lender cap on claims) to give lenders further confidence in continuing to provide finance to SMEs.

This scheme is being delivered through commercial lenders, backed by the British Business Bank.

Eligibility

You are eligible for the scheme if:

  • your business is UK based, with turnover of no more than £45 million per year
  • your business meets the other British Business Bank eligibility criteria

How to access the scheme

The scheme is now open for applications. To apply, you should talk to your bank or one of the 40 accredited finance providers (not the British Business Bank) as soon as possible, to discuss your business plan. You can find out the latest on the best ways to contact them via their websites.

All major banks are offering this scheme. If you have an existing loan with monthly repayments you may want to ask for a repayment holiday to help with cash flow.

The full rules of the scheme and the list of accredited lenders are available on the British Business Bank website.

Support for larger firms through the COVID-19 Corporate Financing Facility

Under the new Covid-19 Corporate Financing Facility, the Bank of England will buy short term debt from larger companies.

This will support your company if it has been affected by a short-term funding squeeze, and allow you to finance your short-term liabilities.

It will also support corporate finance markets overall and ease the supply of credit to all firms.

Eligibility

All non-financial companies that meet the criteria set out on the Bank of England’s website are eligible.

How to access the scheme

The scheme will be available early in week beginning 23 March 2020.

We will provide information on how to access the scheme here shortly.

More information is available from the Bank of England.

Support for businesses paying tax: Time to Pay service

All businesses and self-employed people in financial distress, and with outstanding tax liabilities, may be eligible to receive support with their tax affairs through HMRC’s Time To Pay service.

These arrangements are agreed on a case-by-case basis and are tailored to individual circumstances and liabilities.

Eligibility

You are eligible if your business:

  • pays tax to the UK government
  • has outstanding tax liabilities

How to access the scheme

If you have missed a tax payment or you might miss your next payment due to COVID-19, please call HMRC’s dedicated helpline: 0800 0159 559.

If you’re worried about a future payment, please call us nearer the time.

Insurance

Businesses that have cover for both pandemics and government-ordered closure should be covered, as the government and insurance industry confirmed on 17 March 2020 that advice to avoid pubs, theatres etc is sufficient to make a claim as long as all other terms and conditions are met.

Insurance policies differ significantly, so businesses are encouraged to check the terms and conditions of their specific policy and contact their providers. Most businesses are unlikely to be covered, as standard business interruption insurance policies are dependent on damage to property and will exclude pandemics.

Exciting News from Pixie Payroll

Whilst it’s true that payroll management is a function of accounting and bookkeeping, it is also recognised as a profession in its own right due to the complexities it has to deal with. There is an industry body, the Chartered Institute of Payroll Professionals and I’m over the moon to announce that I’ve just been accepted as a member.

The application process was quite lengthy & detailed, and my application was scrutinised by two separate panels. They wanted to know about my qualifications and professional experience so I had to make sure I didn’t leave anything out or underestimate my achievements, but I finally heard yesterday that my application was successful. I now have the letters MCIPP after my name to go with my FMAAT – I’m going to need bigger business cards!

Being a member of the CIPP is about more than just the letters though. I’ll be getting regular updates on payroll policy and processes and will be able to share best practice with other payroll professional across the country. I’ll also have access to the Advisory Service, so if there are any queries I can’t answer immediately, I’ll be able to consult the CIPP technical experts. The CIPP also encourages CPD so I’ll now have the opportunity to take more training courses to build on my knowledge to ensure I’m always up to date and I’m also hoping to be able to go along to some of the national events that I’ll now be invited to as a member.

Becoming a MCIPP really was a goal of mine and I’m so happy to have achieved it. It will definitely take my payroll practice to the next level and that can only be good news for my clients. Anyone who is considering using me for their payroll management can now have the confidence that my skills and practice has been recognised as outstanding by the industry body so their payroll will be handled professionally and expertly at all times.

Bright Contracts

As you know, I have always focused my business on offering payroll services. But soon, I’m going to be able to add an additional service for customers – the preparation of employment contracts.

At the end of last year and working with Bright Contracts, I took quite an intense training course and then invested in some additional software so I can now create legislation-compliant employment contracts for you, with no legal fees and no fuss.

It is now the law that employers have to provide employees with an employment contract. Currently it has to be done within 8 weeks of the employee starting work, but from April 2020, employees will need to be provided with one on their first day.

Whilst preparing employment contracts might seem like a bit of an administrative burden, they are actually a good thing for both employer and employee. The employer can use them to secure working practices such as when people can take holiday so that the running of the business is not interrupted. They’re also important for setting out policies such as a social media policy so the reputation of the business is not put at risk. For employees, a contract offers a certain level of security of employment and clearly sets out what is part of their job role and what isn’t. It should also clearly set out grievance and anti-bullying procedures, as well as sickness arrangements, so an employee always knows where to go to for help.

Each contract that I create using Bright Contracts can be completely bespoke to a customer’s business, the employee & their role and will be branded with logos for a professional look. A process can even be established whereby when a customer tell me about a new employee to add to the payroll, an employment contract is automatically generated.

The Bright Contracts software will also keep me updated on any changes in employment law – there are a number of new pieces of legislation coming into effect this April including Jack’s Law regarding parental bereavement leave – and provides an overview of the contract status of every employee. It really does take away a lot of admin pressure, especially if there isn’t a dedicated HR role in your business.

If you’d like to talk more about how this additional service I’m now offering could help you, call me on 01326 336364 or email kellie@pixiepayroll.co.uk.

About Me

My name is Kellie Burslem T/A Pixie Payroll Services, I am a local Payroll Bureau based near Helston, Cornwall. I provide a reliable, professional service at a competitive price.

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