CORONAVIRUS MEASURE: SUPPORT FOR BUSINESSES PAYING STATUTORY SICK PAY

The government have announced they 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.
  • Eligible period for the scheme will commence the day after the regulations on the extension of Statutory Sick Pay 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.

If you have any queries please do not hesitate to contact us.

CORONAVIRUS MEASURE: STATUTORY SICK PAY FROM DAY ONE

The Prime Minister, Boris Johnson, has announced that employees will be entitled to Statutory Sick Pay (SSP) from day one when self-isolating rather than having to wait until day four under the SSP waiting days rules.

The change will be included in a package of measures, to be introduced by emergency legislation, to deal with coronavirus.

Updating Parliament on the Government’s response to the virus, Prime Minister Boris Johnson told MPs:

‘I can today announce that the Health Secretary will bring forward, as part of our emergency legislation measures, to allow the payment of Statutory Sick Pay from the very first day you are sick instead of four days under the current rules.

‘No one should be penalised for doing the right thing.’

The Prime Minister had earlier said:

‘We are not at the point yet where we are asking large numbers of people to self-isolate, but that may of course come if large numbers have the symptoms.

‘If they stay at home, they are helping to protect all of us by preventing the spread of the virus.’

The press release advises that the change will be a temporary measure to respond to the outbreak and will lapse when it is no longer required.

 

 

MINIMUM WAGE INCREASES

The National Minimum Wage (NMW) and National Living Wage (NLW) are the legal minimum wage rates that must be paid to employees. Employers are liable to be penalised for not complying with the NMW and NLW rules.

There are different levels of NMW and NLW, depending on age and whether the employee is an apprentice. The rates are due to increase from 1 April 2020 as shown in the following table:

  FROM 1 APRIL 2019 (£) FROM 1 APRIL 2020 (£)
NLW for workers aged 25 and over 8.21 8.72
NMW main rate for workers aged 21-24 7.70 8.20
NMW 18-20 rate 6.15 6.45
NMW 16-17 rate for workers above school leaving age but under 18 4.35 4.55
NMW apprentice rate * 3.90 4.15

*for apprentices under 19 or 19 or over and in the first year of their apprenticeship

There are no exemptions from paying the NMW on the grounds of the size of the business.

If you would like help with payroll matters please get in touch.

A DECADE OF BIZARRE EXCUSES AND EXPENSE CLAIMS

Vengeful witches and pet hamsters feature in HMRC’s list of imaginative excuses and expense claims, which has been published in the run up to the self assessment deadline.

HMRC has compiled a list of the weirdest unsuccessful excuses from the last decade.

The list includes one taxpayer who claimed their mother-in law was a witch who had cursed them, hamsters and dogs that had eaten the post and a taxpayer who was up a mountain without internet access.

HMRC also reported questionable expense claims including pet food for a Shih Tzu ‘guard dog’ and 250 days of claims for a £4.50 sausage and chips meal.

Commenting on the list, Angela MacDonald, HMRC Director General of Customer Services, said:

‘Each year, we try to make it as easy and simple as possible for our customers to complete their tax returns and the majority make the effort to do their’s right and on time.

‘We always offer help to those who have a genuine excuse for not submitting their return on time. It is unfair to the majority of honest taxpayers when others make bogus claims.’

Internet link: GOV.UK news

HMRC OFFERS TIPS ON AVOIDING SELF ASSESSMENT TAX SCAMS

HMRC is giving information to taxpayers to help them avoid scams ahead of the Self Assessment deadline.

HMRC is warning millions of Self Assessment taxpayers to be aware of fraudsters in the run up to the 31 January deadline.

Over the last year, HMRC received almost 900,000 reports from the taxpayers about suspicious HMRC contact, in the form of phone calls, texts or emails. Of these more than 100,000 were phone scams and over 620,000 reports related to bogus tax rebates.

According to HMRC the most common techniques fraudsters use include phoning taxpayers offering a fake tax refund, or pretending to be HMRC by texting or emailing a link to a false page, where their bank details and money will be stolen. Fraudsters are also known to threaten victims with arrest or imprisonment if a bogus tax bill is not paid immediately.

HMRC’s Customer Protection team identify and close down scams but taxpayers should recognise the signs to avoid becoming victims. HMRC does not contact taxpayers asking for their PIN, password or bank details. Taxpayers are warned that they should never give out private information, reply to text messages, download attachments or click on links in texts or emails which they are not expecting.

HMRC COUNTDOWN: FILE YOUR TAX RETURN

With less than 100 days until the self assessment tax return deadline of 31 January 2020, HMRC is urging taxpayers to complete their tax returns early, in order to avoid the last minute rush.

HMRC report that last year more than 2,000 people submitted their tax returns on Christmas Day. Taxpayers should consider submitting their returns early to avoid the stress of a last minute rush.

Angela MacDonald, HMRC’s Director General for Customer Services, said:

‘The deadline for completing Self Assessment tax returns is only 100 days away, yet, so many of us wait until January to start the process. Avoid the last minute rush by completing your tax returns on time and then enjoy the upcoming festive period.

We want to help people get their tax returns right – starting the process early and giving yourself time to gather all the information you need will help avoid that stressful, late rush to file.’

Not all taxpayers need to complete a tax return as tax is automatically deducted from the majority of UK taxpayers’ wages, pensions or savings. For people or businesses where tax is not automatically deducted, or when they may have earned additional untaxed income, they are required to complete a Self Assessment tax return each year.

HMRC is also reminding people who are liable for the High Income Child Benefit Charge that they may need to file a tax return before the deadline. Those with income over £50,000 who receive child benefit, or those whose partner gets it, are liable for the charge. Taxpayers can check their annual income via their P60 or Personal Tax Account, and use HMRC’s child benefit tax calculator.

The deadline for filing paper tax returns was 31 October 2019 and the deadline for online tax returns and paying any tax owed is 31 January 2020. If taxpayers miss the deadline, they face a minimum £100 penalty for late submission.

Contact us for help with your self assessment tax return.

VAT DOMESTIC REVERSE CHARGE FOR BUILDING AND CONSTRUCTION SERVICES DELAYED

HMRC has announced a one-year delay to the introduction of the VAT domestic reverse charge for building and construction services.

The reverse charge represents part of a government clamp-down on VAT fraud. According to the government, large amounts of VAT are lost through ‘missing trader’ fraud. As part of missing trader fraud, VAT is charged by a supplier, who then disappears, along with the output tax. The VAT is thus lost to HMRC. The construction industry is considered a particularly high-risk sector.

The reverse charge when introduced will not change the VAT liability but instead it will change the way that VAT is accounted for. In the future, the recipient of the services, rather than the supplier, will account for VAT on specified building and construction services. This is called a reverse charge. The reverse charge is a business-to-business charge, applying to VAT-registered businesses where payments are required to be reported through the Construction Industry Scheme (CIS).

The charge was due to come into effect on 1 October 2019. It has now been delayed by 12 months until 1 October 2020 due to fears that businesses in the construction sector were not ready.

HMRC says it remains ‘committed to the introduction of the reverse charge’, and has put a robust compliance strategy into place in order to tackle fraud in the construction sector.

If you require any further information or help regarding this, please do not hesitate to contact our office.

MINIMUM WAGE INCREASES

The National Minimum Wage (NMW) and National Living Wage (NLW) are the legal minimum wage rates that must be paid to employees. Employers are liable to be penalised for not complying with the NMW and NLW rules.

There are different levels of NMW and NLW, depending on age and whether the employee is an apprentice. The rates are due to increase from 1 April 2019 as shown in the following table:

  FROM 1 APRIL 2018 (£) FROM 1 APRIL 2019 (£)
NLW for workers aged 25 and over 7.83 8.21
NMW main rate for workers aged 21-24 7.38 7.70
NMW 18-20 rate 5.90 6.15
NMW 16-17 rate for workers above school leaving age but under 18 4.20 4.35
NMW apprentice rate * 3.70 3.90

*for apprentices under 19 or 19 or over and in the first year of their apprenticeship

There are no exemptions from paying the NMW on the grounds of the size of the business.

If you would like help with payroll matters please get in touch.

PENSIONS AUTO ENROLMENT CONTRIBUTIONS TO RISE

Minimum pension contributions are set to increase from 6 April 2019:

DURATION EMPLOYER MINIMUM (%) TOTAL MINIMUM CONTRIBUTION (%)
Current contributions 2 5
6 April 2019 onwards 3 8

The Pensions Regulator has produced guidance for employers on dealing with the increase including a letter template to advise employees of the change.  

Contact us if you would like help with auto enrolment.

START DATE LOOMING FOR MAKING TAX DIGITAL FOR VAT

The Financial Secretary to the Treasury, Mel Stride, has made a statement to the House of Commons setting out HMRC’s progress on delivery of Making Tax Digital (MTD). He confirmed there would be no further delays in implementation.

For most businesses, compliance with the regulations is mandated for VAT return periods beginning on or after 1 April 2019. However, MTD for VAT for some ‘more complex’ businesses has been deferred until 1 October 2019. This deferral applies to trusts; not for profit organisations not set up as companies; VAT divisions; VAT groups; public sector entities such as government departments and NHS Trusts, which have to provide additional information on their VAT return; local authorities; public corporations; traders based overseas; those required to make payments on account; annual accounting scheme users.

Contact us for help and advice on MTD for VAT.