01903 300230 MENU

Posts archive for ‘Uncategorized’


1st April 2020

Coronavirus Job Retention Scheme Details (as at 26th March 2020)

Filed Under: Uncategorized


Scheme Summary

  • The Job Retention Scheme is a temporary scheme open to all UK employers from 01 March 2020 to 30 May 2020.
  • Employers are able to reclaim 80% of ‘Furloughed’ employee wages to prevent redundancy during the outbreak of the Coronavirus.
  • Furloughed employees are workers who have been asked to stop working due to the employer not being able to cover the staff costs due to the Coronavirus. This is to retain staff who otherwise would have been made redundant during the outbreak.

 

Rules of the Scheme

  • Applicable to all UK businesses, charities, recruitment agencies and public authorities.
  • The scheme is available for employees on the payroll at 28 February 2020. Any employee who is NOT on the February payroll will not be eligible.
  • The employer must hold a UK bank account.
  • The scheme pays a grant, not a loan, to the employer.
  • If a company appoints an administrator, the administrator will be able to access the scheme.
  • Furloughed staff must NOT complete any work during the period of furlough.
  • While on furlough, the employee’s wage will be subject to the usual income tax, national insurance and other deductions.
  • Commission and bonus payments are NOT The scheme is only available on the basic wage.
  • Employers must pay their employee the lower of 80% of their regular wage or £2,500 per month.
  • Employers can choose to top-up the remaining 20% if they wish. This will NOT be covered by the grant.
  • Employees can be furloughed for a minimum of 3 weeks.

 

Employees Eligible

  • Full time and part-time employees.
  • Employees on agency, flexible and zero-hour contracts.
  • Employees who were made redundant since 28 February 2020.
  • If an employee is working on reduced hours or pay, they will NOT be eligible for the scheme.
  • Furloughed employees have the same rights as they did previously. 

     

 

What Employers need to do?

  • Discuss with their employees the furloughed status and make any changes to the employment contract. If a letter of Furloughed Status is required, please contact THL.
  • Advise their employees they will receive 80% of their monthly salary. (If on hourly pay this will be an average over a period at the employers’ discretion).
  • Arrange payment to the furloughed employees the 80% (frequency is at the employers’ discretion).
  • Employers will need to calculate the amount to pay their employees. (An example calculation has been included below). This will be completed by THL if we are engaged to complete the company payroll.
  • Employers will need to make a claim for the wage costs through a new HMRC Online Service. This is expected to be available by the end of April 2020.
  • You will only be allowed to submit one claim every 3 weeks.
  • To claim employers will need the following;
  1.                   ePAYE reference number
  2.                   Number of employees being furloughed
  3.                   The claim period (start and end date)
  4.                   Amount claimed (per minimum length of furloughing of 3 weeks)
  5.                   Bank account number and sort code
  6.                   Your contact name
  7.                   Your phone number

Please note – HMRC will retain the right to audit all aspect of your claim.

  • Once HMRC receive the claim and check you are eligible for the grant, payment will be made via BACS to your chosen UK bank account.
  • Once the scheme has been closed by the government, HMRC will continue to process remaining claims before terminating the scheme.
  • Employees will be able to opt out of their Auto-Enrolment pension scheme to increase the net salary received. This will need to be completed by the employee themselves. They should notify their pension provider if they wish to do this.

Example Calculation 1

X Ltd employs Mr A at an annual salary of £24,000, so £2,000 per month. Mr A has opted out of auto enrolment.

Each month, Mr A currently receives net pay of £1,655 which is after deducting PAYE of £191 and employees NIC of £154. On this salary, the employer pays employers’ NIC of £177.

The available grant for the employer is the lower of;

(a) 80% of £2,000, and

(b) £2,500

Plus employers’ NIC on this amount

So X Ltd claims a grant of £1,600 plus £122 = £1,722.

The net amount of cash required by X Ltd to furlough Mr A based on maintaining the existing salary is £1,600 (80% paid by grant) + £400 (20% paid by employer) = £2,000 + £177 – £1,722 = £455 per month.

It is a matter for employment law whether the employer is actually required to pay this top up. Employees and employers can agree to a different arrangement during the furlough.

 

Example Calculation 2

X Ltd employs Mr B at an annual salary of £42,000, so £3,500 per month. Mr B has opted out of auto enrolment.

Each month, Mr B currently receives net pay of £2,675 which is after deducting PAYE of £492 and employees NIC of £333. On this salary, the employer pays employers’ NIC of £383.

The available grant for the employer is the lower of

(c) 80% of £3,500 = £2,800, and

(d) £2,500

Plus employers NIC, £245, on this amount

So X Ltd claims a grant of £2,500 plus £245 = £2,745.

The net amount of cash required by X Ltd to furlough Mr A based on maintaining the existing salary is £3,500 + £383 – £2,745 = £1,138 per month.

It is again a matter for employment law whether the employer is actually required to pay this top up. Employees and employers can agreed to a different arrangement during their furlough.

 

If you liked this post please share it:

31st July 2019

Client Sign Up – Making Tax Digital (MTD) for VAT

Filed Under: Uncategorized


As you are aware Making Tax Digital (MTD) for VAT is now in effect for those businesses with turnover above the VAT threshold of £85,000.

HMRC requires these businesses to sign up to MTD for VAT online via the Gov.uk website and then link the Government Gateway account to your chosen MTD compatible software.

If you submit your own VAT returns you will need to complete the process yourself using your current Government Gateway account that you currently use to submit VAT returns.

The schedule shows when your first MTD compliant VAT Return will need to be submitted. Signing up with HMRC will need to be completed at least 7 days before submitting the first MTD compliant VAT return.

Please note; Download and save a copy of your VAT Certificate before completing this process.

  • To sign up you will need your Government Gateway credentials and the date of registration
  • Signing up for MTD with HMRC needs to be completed at least 7 days before submitting your first MTD compliant VAT return.
  • Software can be linked once a confirmation email from HMRC has been received.
  • Once registered you will not be able to submit VAT returns manually on the HMRC website, only through compatible software.
  • If VAT is usually paid by Direct Debt (DD), please contact HMRC to ensure the DD Payment will be taken after signing up to MTD. There have been circumstances where HMRC has not taken the DD. If you have any queries please get in contact.

 HMRC Sign Up

To sign up to Making Tax Digital for VAT with HMRC, please click on the below link. Select “Sign up your own business” follow the steps and wait for confirmation by email that you’ve been moved to the MTD service.

https://www.gov.uk/guidance/sign-up-for-making-tax-digital-for-vat

Once the email has been received, you will then be able to link your software to the Government Gateway Account.

Please do not hesitate to contact us on 01903 300230, if you have any queries.

If you liked this post please share it:

17th June 2019

Tax Free Childcare

Filed Under: Uncategorized


Do you qualify for tax-free childcare through the Government scheme?

This scheme is available for working families in the UK, including the self-employed, for children between the ages of 0 – 11.

Please see the link for more details or contact us on 01903 300230

 

If you liked this post please share it: