HMRC / Employment updates
- The Government has introduced legislation which will ensure that employees who have benefitted from the Coronavirus Job Retention Scheme do not lose out on certain entitlements.
- The legislation will ensure that a number of statutory rights including redundancy pay, notice pay and compensation for unfair dismissal are based on an employee’s normal pay, rather than their furlough pay (potentially 80% of their normal wage).
- The new legislation will ensure that the entitlements outlined above, relating to termination of employment, are based on an employee’s normal pay rather than on any reduced rate relating to being furloughed.
- Whilst the Government hope that employers will do everything they can to avoid making redundancies, this legislation will ensure that where someone who had previously been furloughed does lose their job, they receive the full compensation they are due.
- ACAS can advise about how to work out average weekly pay for someone that has been on furlough.
Self Employed Support Scheme (SEISS round 2) is now open:
- If eligible for the second and final grant, and the business has been adversely affected on or after 14 July 2020, you can make a claim on or before 19 October 2020.
- You can claim for the second grant even if you did not make a claim for the first grant. If you have different circumstances it can affect your eligibility.
- If you’re self-employed or member of a partnership, find out how your circumstances can affect your eligibility for the scheme.
- How HMRC works out trading and non-trading income for the Self Employment Income Support Scheme.
End of VAT payment deferrals period:
- To provide government support during the early stages and peak of the COVID-19 pandemic, HMRC gave businesses the option to defer VAT payments if they were unable to pay on time. They could do this without incurring late payment interest or penalties.
- Under the scheme, payment of VAT due between 20 March and 30 June could be deferred until 31 March 2021. VAT deferred through the scheme can be paid through ad hoc payments and overpayments ahead of the deadline if preferred, so long as full payment is made by that date.
- As planned, the scheme came to an end on 30 June. Businesses now need to set up any cancelled direct debits in time for payment of their next VAT return. Further information can be found on GOV.UK.
- If VAT registered, you can sign up to Making Tax Digital to experience the productivity benefits of using digital tools. To find out more visit GOV.UK.
Cornavirus Job Retention Scheme (CJRS), flexi furlough and Bonus scheme – changes to the scheme from September
- CJRS will pay 70% of usual wages up to a cap of £2,187.50 per month for the hours furloughed employees do not work.
- Employers will still need to pay furloughed employees at least 80% of their usual wages for the hours they do not work, up to a cap of £2,500 per month. They will need to fund the difference between this and the CJRS grant themself.
- The caps are proportional to the hours not worked. For example, if an employee is furloughed for half their usual hours in September, employers are entitled to claim 70% of their usual wages for the hours they do not work up to £1,093.75 (50% of the £2,187.50 cap).
- Employers will continue to have to pay furloughed employees’ National Insurance (NI) and pension contributions from own funds
- Guidance about the Job Retention Bonus scheme is due by the end of September but this allows employers to claim a one-off payment of £1000 for every employee they have previously received a grant for under the CJRS i.e. at least 3 consecutive weeks between 01.03.20 and 30.06.20, and who remains continuously employed through to the end of January 2021. To be eligible, the employee must have received earnings in November, December and January and must have been paid an average of at least £520 per month, a total of at least £1,560 across the three months. If a statutory or contractual notice period started before 01.02.21, they will not be able to claim it for those employees. Employers will be able to claim the bonus after they have filed PAYE information for January 2021, and the bonus will be paid from February 2021. The bonus will be taxable. If a claim for the CJRS was made incorrectly, the bonus will not be payable.
If employers intend to claim the Job Retention Bonus, they must:
- ensure all employee records are up to date
- accurately report employees’ details and wages on the Full Payment Submission (FPS) through the Real Time Information (RTI) reporting system
- make sure all CJRS claims have been accurately submitted and they have told us about any changes needed (for example if they’ve received too much or too little).