22 Mar

Mel's COVID-19 & General Business Update: 22nd March 2021

Mel's COVID-19 & General Business Update: 22nd March 2021

During COVID-19 I want to ensure that everyone is as up to date as possible with regards to Government changes and support that impacts businesses. Please note that this update is correct as of date of publishing (22nd March 2021).

1. Finishing Tax Year 2020-21 and Preparing for 2021-22

As we head towards April now is the time to think about pre-tax year planning, doing the year end administration and filing the necessary forms to HMRC. Time is running out to make the most of your tax allowances this year!

  • The first step to making the most of your tax allowances can mean looking closely at your pension - UK residents under 75 can add money to a pension and receive tax relief on it. You’ll automatically get basic rate tax relief (currently 20%) paid into your pension by the government.

  • If you pay tax at a higher rate you could get up to a further 25%, but you will need to claim it by declaring any pension contributions you have made on your tax return.

  • The annual allowance is the maximum you can invest in your pension each year that would be eligible for tax relief. It is currently £40,000, or your entire income, whichever is the smaller and there are lifetime allowances to consider.

  • If you run a limited company then there are some actions you could consider such as dividend and salary planning, purchasing capital items to maximise capital allowances, research and development tax credits and a range of other matters.

2. Payroll Administration

  • If you run your own payroll, it is time to look at the end of year payroll tasks for the current year and key changes affecting payroll for 2021-22.

  • HMRC have updated their webpage on annual reporting and tasks needed before 5 April 2021. This covers sending your final payroll report, updating employee payroll records, updating payroll software, issuing P60s and reporting expenses and benefits. Click here to read more.

  • HMRC have issued their guidance on P9X: Tax codes, to assist in understanding which PAYE tax codes to change, how to change them and which codes to carry forward ready for the new tax year. Click here to read more.

  • For the 2021-22 rates and thresholds for employers when you operate your payroll or provide expenses and benefits to your employees, click here to read more.

If we prepare your payroll we will of course file the necessary tax year end forms for you and keep you informed of any changes.

3. Prepare for Tax Changes if You Engage or Supply Contractors – Off-payroll Working Rules (IR35)

If you are a medium or large sized non-public sector organisation and you engage contractors, you should now be taking action to prepare for changes to the off-payroll working rules (IR35) coming into effect on 6 April 2021.

For all contractors working through their own limited company, you will need to:

  • Identify contractors who work in this way.

  • Decide if they are inside or outside the rules.

  • Inform your contractors of their status determination, and any agencies you engage with be ready to add them to payroll if needed.

  • Be ready to deal with any disputes.

  • Maintain an audit trail, and test your processes, systems and controls.

If you are an employment agency which supplies contractors who work through their own limited company or other intermediary, you need to understand the changes and may also need to take action. You need to:

  • Identify contractors who work in this way.

  • Be ready to pass on the status determination statement to any agencies you engage with down the supply chain or be ready to put contractors onto payroll.

  • Maintain an audit trail, and test your processes, systems and controls.

You can find more information about the actions you need to take to prepare by clicking here.

Please talk to us about pre-tax year end planning for your business - we are here to support you in preparing for the new tax year and beyond!

4. VAT Deferral – Apply Now to Spread Your Payments

  • The VAT deferral new payment scheme is open for all businesses who deferred VAT due between 20 March and 30 June 2020 and still have payments to make, or who are unable to pay in full by 31 March 2021.

  • This includes those on Payment on Account and Annual Accounting schemes.

  • Apply now to spread these payments over a number of months – the later you join the fewer instalments are available to you.

  • Join from 19 March 2021 to benefit from the maximum number of 11 instalments.

  • You can join the scheme online without the need to call HMRC. To find out more information, including the things you need to do before joining, go to GOV.UK and search 'VAT deferral'.

5. CJRS Claims for March

  • You can now submit your CJRS claims for periods in March 2021.

  • These must be made by Wednesday 14 April.

  • You can claim before, during or after you process your payroll. If you can, it’s best to make a claim once you’re sure of the exact number of hours your employees will work so you don’t have to amend your claim later.

  • Check if you and your employees are eligible and work out how much you can claim using our CJRS calculator and examples, by searching 'Job Retention Scheme' on GOV.UK

What you need to do now:

  1. If you haven’t submitted your claim for February but believe that you have a reasonable excuse for missing the deadline, check if you can make a late claim by searching 'claim for wages' on GOV.UK

  2. Submit any claims for March no later than Wednesday 14 April.

  3. Keep records that support the amount of CJRS grants you claim, in case HMRC needs to check them.

6. Extension to the CJRS

  • As announced in the 2021 Spring Budget, the CJRS has been extended until the end of September 2021.

  • For periods from 1 May 2021 onwards, you will be able to claim for eligible employees who were on your PAYE payroll on 2 March 2021. This means you must have made a PAYE Real Time Information (RTI) submission between 20 March 2020 and 2 March 2021, notifying HMRC of earnings for that employee.

  • The government will continue to pay 80% of employees’ usual wages for the hours not worked, up to a cap of £2,500 per month, up to the end of June 2021.

  • For periods in July, CJRS grants will cover 70% of employees' usual wages for the hours not worked, up to a cap of £2,187.50. In August and September, this will then reduce to 60% of employees’ usual wages up to a cap of £1,875.

  • You will need to continue to pay your furloughed employees at least 80% of their usual wages for the hours they do not work during this time, up to a cap of £2,500 per month. This means, for periods between July and September, you will need to fund the difference between this and the CJRS grants yourself. You can also top up wages above the 80% if you wish, but you are not required to do so.

  • You must continue to pay Employer National Insurance contributions and pension contributions on subsidised furlough pay from your own funds.

Please note the link to the Gov article regarding this section is no longer accessible and so was removed from this blog post on the 12th January 2022. 

7. Providing Apprenticeships During the Coronavirus (COVID-19) Outbreak

  • The Department of education (DoE) has updated its guidance to reflect the extension of the Coronavirus Job Retention Scheme and remove advice relating to pre-March 8 2021.

  • This guidance is for apprenticeship training providers (providers), employers, end-point assessment organisations (EPAOs) and apprentices.

  • It describes how and when apprentices can safely train and undertake assessment in the workplace, education and assessment settings and the temporary flexibilities which apply during the coronavirus (COVID-19) outbreak.

  • The DoE aim is to help employers and apprentices start, continue and complete their apprenticeships wherever possible. Some of this guidance can be found on the apprenticeship service help page for employers, providers and assessment organisations, as well as in articles for apprentices.

Click here to read more. 

8. One-off £500 Payment for Working Households Receiving Tax Credits

  • The coronavirus support scheme for working households receiving tax credits has been updated to clarify that the payment is non-taxable and will not affect benefits.

  • It does not need to be declared as income for Income Tax Self-Assessment or for tax credit claims and renewals.

  • If you want to change your bank details, you must do this by 8 April.

Click here to read more. 

9. Tell HMRC About an Option to Tax Land and Buildings

  • The temporary changes on the rules on notifying HMRC of an option to tax land and property during coronavirus (COVID-19) have been extended to 30 June 2021.

  • Use form VAT1614A to tell HMRC of an option to tax land or buildings. Click here

10. Coronavirus Restart Grant - England

  • The Restart Grant scheme supports businesses in reopening safely as COVID-19 restrictions are lifted.

  • Grants will be available from 1 April 2021, but you can submit applications in advance.

  • Eligible businesses in the non-essential retail, hospitality, accommodation, leisure, personal care and gym sectors may be entitled to a one-off cash grant of up to £6,000 from their local council.

Your business may be eligible if it is:

  • Based in England.

  • Rate-paying.

  • In the non-essential retail, hospitality, accommodation, leisure, personal care or gym sectors.

  • Trading on 1 April 2021.

Local councils will use their discretion to determine whether businesses meet the eligibility criteria for this grant scheme.

Eligible businesses will be paid:

  • A one-off grant of up to £6,000 in the non-essential retail sector.

  • A one-off grant of up to £18,000 in the hospitality, accommodation, leisure, personal care and gym sectors.

Click here to read more. 

11. Local Restrictions Support Grants (LRSG), Additional Restrictions Grant (ARG), Christmas Support Payment (CSP) for Wet-led Pubs: Guidance for Local Authorities – England

  • This is guidance for local authorities on paying grants to support businesses during national lockdown periods and periods of local restrictions.

  • The documents may be worth a read if your business is applying for any of the grants noted above.

Click here to read more. 

12. Funding Boost for Construction Skills Bootcamps - England

  • Over half a million pounds awarded to expand work programmes to help more people gain in demand sector-specific skills has been announced.

  • Two regions will benefit to expand the delivery of the construction skills bootcamps, helping more people to gain vital skills in demand from employers.

  • The funding will focus on developing test models that can be scaled to other areas.

  • Skills bootcamps offer free, flexible courses lasting up to 16 weeks covering areas including construction, digital and technical.

  • The courses are open to adults aged 19 and over and provide a chance to learn sector-specific skills and offer a fast-track to an interview with a local employer at the end.

  • The West Midlands Combined Authority will receive £475,000 to train people for green jobs in the construction industry.

  • While Devon County Council will receive £40,645 to expand their successful brickwork bootcamps to help deliver the skills pipeline needed by employers in the Heart of the South West.

  • Both areas have also been running successful digital skills bootcamps including in software development, cyber security, data analytics and digital healthcare.

  • Skills bootcamps are currently running in six areas across England, with over 2,700 learners participating so far.

Click here to read more. 

If you have any questions on the above, please do not hesitate to get in contact. 

Warm regards,

Mel Signature Red

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