Finding it hard to keep up with the latest help from HMRC as well as if we are allowed to Trick or Treat...
Redundancy and Notice Pay for Furloughed Employees
With the end of the Coronavirus Job Retention Scheme fast approaching, more employers are having to consider the issue of redundancies. New regulations which came into effect on 31 July 2020 have changed the way in which statutory redundancy and notice pay must be calculated in respect of employees who have been furloughed. If a worker loses their job and is entitled to redundancy pay, this should be calculated based on their pre-furlough wages. Firms cannot use the money from furlough to subsidise redundancy packages.
Replacement of Furlough In November
Under the expanded JSS, the cost of keeping the staff on the payroll is split between the government, the employer and the employee, with the employer bearing a relatively small amount of employer’s NIC and pension contributions.
To be eligible, the employee must be furloughed for periods of at least 7 days at a time, during which they will receive 66% of his wages. Employees are only eligible for this support if they were on the payroll of the employer an included on an RTI return before 23 September 2020.
The employer will have to pay the employee’s wage upfront plus any employer’s NIC and the minimum employer’s pension contributions on those wages. The employer will then claim back the cost of the wages paid from HMRC (capped at £2,100 per month), but not the NIC or pension contributions.
The scheme will be open from 1 November 2020 to the end of April 2021.
You can make a claim online through gov.uk from December and you’ll be paid on a monthly basis.
The employee must give up one third of their wages, and will have to agree to that change in their employment contract in writing if they are not already on a zero hours contract.
Job Retention Bonus
The bonus is worth £1,000 per furloughed employee. The employee must have been included in a CJRS claim and must be continuously employed until 31st January 2021.
The criteria to claim are:
The employee must have received taxable pay in the three tax months:
6th November to 5th December, 6th December to 5th January, 6th January to 5th February
The employee must have received at least £1,560 in taxable pay across those three months
The full payment submission for each of the above months has been submitted to HMRC on time and is accurate
The payment submission must be submitted under RTI
The Bounce Back Loan
Loans are available for 25% of your 2019 turnover to self employed and limited companies to a value of £50,000.
The business owners won’t have to repay anything towards their Bounce Back Loan in the first 12 months as the government is also paying the interest for the first year after the loan was taken out. The Interest rate after the first year is 2.5%.
In September 2020, the government announced changes to the BBLS, designed to give businesses more flexibility in how they repay the loan. These include:
new and existing loans can be repaid over 10 years, rather than six
you can take one payment holiday lasting six months, but you have to have made six payments to use this option
you can choose to make interest-only repayments three times over the course of the loan, with each interest-only period lasting up to six months
Any extensions to your loan, as well as payment holidays or interest-only payments will result in paying more interest. You can apply through your bank or through the government website, recommended is your own business bank account first.
As of September, the government extended the deadline for applying for a new Bounce Back Loan from 4 November 2020 to 30 November 2020.
Self-employment income support scheme
A new grant will be available for self-employed people to cover the period from November 2020 to January 2021.
If you’re eligible, the government will pay 20% of your average monthly profits, up to a maximum total of £1,875.
Submitted a tax return for 2018/19
have an average trading profit of less than £50,000 for the tax years 2016/17, 2017/18 and 2018/19
There will be further help from February for the self employed from February 2021.