03/02/2021 Holderness Gazette Article
……and relax……
We all breathed a huge sigh of relief on Sunday evening when the Self-Assessment deadline passed. I have thanked many people in my articles over the last year, NHS staff, teacher, supermarket workers and volunteers. However, today, I want to look a little closer to home. I want to thank our fabulous team at Southgates for going above and beyond in strange circumstances, to ensure as many of our client filed their Tax returns before the end of January. There were many early mornings, late nights, and weekends, but we got them done, as a team. I am proud of the team we have and the way we all pull together to look after our clients. I know our clients appreciate all they do for them. They often tell us.
If you want to experience the care and dedication our team puts in to supporting our clients, why not get in touch. We will be happy talk to you and explain why we think we are the best in the area…and maybe beyond. Moving to us couldn’t be easier. We can do everything for you to make it a seamless transition as possible. All you need to do is pick up the phone and give us a call. We believe you won’t be disappointed.
You might want to watch out on our Facebook page, @southgatesACCA. We are wanting to share more joy over the next few week and will be giving away some more lovely goodies. We have already had two lucky “winners” who have received a fantastic hamper and a truly delicious Spotted Duck afternoon tea for two. Who knows what might be next!
Self-Assessment Deadline
On 25 January HMRC announced that Self-Assessment customers will not receive a late filing penalty for their late tax return if they file online by 28 February.
This easement is for late filing penalties only. It does not affect any other tax obligations. A return received in February will be treated in the same way as a return filed in February in a ‘normal’ year where there is a reasonable excuse – the penalty will not be charged but the return is treated as late for the purposes of enquiry windows, etc.
Tax still needs to be paid by 31 January. Interest will be charged from 1 February on any outstanding liabilities. If any tax remains outstanding on 3 March, customers will be charged a late payment penalty of 5% of the amount still due.
Customers that do not pay in full by 31 January will be able to use the Self-Serve Time to Pay service on GOV.UK to set up an affordable plan where they can pay overtime in instalments. Interest will still be charged but if they set up the payment plan before 3 March, they won’t be charged a late payment penalty as long as they keep to the terms of the payment plan.
Deadlines
December Furlough claim to be made before 14th January 2021.
Self Employed Income Support Grant
– Details about the fourth grant will be announced on 3 March 2021.
Understanding furlough and the Job Retention Scheme
Up until 2020, the concept of “furlough” had not existed in UK employment law. However, with the coronavirus outbreak causing issues for businesses across the UK, the Government implemented the Job Retention Scheme. This means that employers are able to place their employees on “furlough” — a temporary leave of absence where they are not required to work but are retained on the books to be brought back in when needed. Employers who do this can obtain a grant from the Government to cover the furloughed employees’ wages.
Under the Job Retention Scheme, staff placed on furlough by following the correct procedure have 80% of their wages covered by the Government, up to a maximum of £2500 per employee. This means that you can continue to pay them while they are furloughed, and 80% of the cost is covered through a government grant.
Applications for the Government grant under the scheme opened on 20 April 2020. The scheme will close on 30 April 2021.
A brief history of the Job Retention Scheme
The scheme was originally launched in March 2020, with the Government providing 80% of employee wages alongside National Insurance and employer pension contributions.
In July, a number of changes were made to the scheme, with the intention of winding it down until it was to be ended and replaced by a new scheme on 31 October 2020. From July, flexible furlough was introduced, meaning that furloughed staff could still undertake work, but no government grant could be claimed for the time in which they worked, and they needed to be paid in full.
From August, organisations were asked to pay National Insurance and employer pension contributions for all furloughed employees, although the Government would continue to provide 80% of their wages. In September, this dropped down to 70% and, in October, to 60%. From 1 November 2020, a new scheme, the Job Retention Scheme, was set to replace the furlough scheme, with a focus on assisting organisations that could remain open as lockdown restrictions were relaxed.
However, on 31 October 2020 it was announced that the furlough scheme was to be extended once again due to the introduction of a new period of lockdown in England. The Government was to again provide 80% of employee wages, while organisations were asked to pay National Insurance and employer pension contributions.
As of January 2021, the scheme is set to last in its current form until the end of April 2021.
Understanding full and flexible furlough
A furloughed employee is someone who, rather than being dismissed for redundancy by their employer or being put on lay off, is kept on the payroll during a period where the employer does not have any work for them or does not have work for their full normal working hours.
An employee on full furlough will do no work for their employer during the claim period.
An employee on flexible furlough will work for some of their usual hours (i.e., part time) and will be recorded as being on furlough for the remainder of their usual hours during the claim period.
When businesses can use the Job Retention Scheme
Government guidance outlines that the scheme has been introduced to help businesses severely affected by the coronavirus. If your business has not seen a downturn due to the pandemic, you should not seek to use the scheme. From February, HMRC will be posting a list of all companies who have used the scheme from 1 December 2020.
All employers with a UK bank account and UK PAYE schemes can use the scheme to claim the grant, whether their business is open or closed. There is no limit on size or sector and, importantly, you do not need to have used furlough before to use the scheme from November onwards.
Furloughing staff eligibility
To be eligible, the individual must be PAYE meaning that you deduct their tax and National Insurance contributions before you pay them and are told how much to deduct through their tax code. Individuals must also have been on your PAYE payroll by 23:59 on 30 October 2020.
Full-time, part-time, temporary, zero hours and fixed-term staff can all be included as long as they are PAYE, as can apprentices. An employee on a fixed-term contract that has not expired can be kept on through the extension of their contract as long as they were employed by you on or before 30 October 2020.
Furloughing staff recently made redundant.
If employees were employed by you on 23 September 2020 and you made a PAYE RTI submission to HMRC between 20 March 2020 and 30 October 2020, notifying a payment of earnings for that employee) and they were made redundant or stopped working for you on or after 23 September 2020, they can also qualify for the scheme if you re-employ them.
When approaching this, you should make it clear that employment is not continuous and should therefore seek to have a break in employment of at least on week ending with a Saturday.
Furloughing employees due to shielding and childcare
Employees can be furloughed, if they are unable to work, including from home or working reduced hours because they:
- are clinically extremely vulnerable, or at the highest risk of severe illness from coronavirus and following public health guidance.
- have caring responsibilities resulting from coronavirus, such as caring for children who are at home as a result of school and childcare facilities closing or caring for a vulnerable individual in their household.
- transferred from their old employer to you on or after 1 September 2020.
- employed by either their old employer or you on 30 October 2020.
- on a PAYE Real Time Information (RTI) submission to HMRC, by their old or new employer between 20 March 2020 and 30 October 2020, notifying a payment of earnings for that employee.
The Scheme cannot be used in respect of employees on unpaid leave or unpaid sabbatical.
Choosing staff to furlough
It is up to you who you place on furlough. Decisions should be taken in line with business need and account for any particular challenges that it may be facing. You do not have to furlough all your staff. Where selection does need to take place, it may be appropriate to implement a similar selection period as would be used in a redundancy situation so that the most effective employees remain in work.
As always, stay safe and help each other get through this.