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March 30, 2020 By Andrew Gilpin Leave a Comment

Job Retention Scheme – Update

Dear Payroll Client

We are trying to continue to run our payroll service as best possible in the current situation, with regards to the new changes to employees pay in relation to the job retention scheme we will need you to confirm the following to ensure that we process the correct pay figures to HMRC:-

Do you want us to reduce your employees Salaries to 80% or maintain the 100% payment and the employer pay 20%?

If you do want us to reduce the salary to 80% when is this to commence?

We have set out below an update from HMRC on the Job Retention scheme to explain the claim process and help you with any further questions you may have.

Claim for wage costs through the Coronavirus Job Retention Scheme

The Coronavirus Job Retention Scheme is a temporary scheme open to all UK employers for at least three months starting from 1 March 2020. We expect the scheme to be up and running by the end of April. It is designed to support employers whose operations have been severely affected by coronavirus (COVID-19).

Employers can use a portal to claim for 80% of furloughed employees’ (employees on a leave of absence) usual monthly wage costs, up to £2,500 a month, plus the associated Employer National Insurance contributions and minimum automatic enrolment employer pension contributions on that wage. Employers can use this scheme anytime during this period.

The scheme is open to all UK employers that had created and started a PAYE payroll scheme on 28 February 2020.

Who can claim

Any UK organisation with employees can apply, including:
Businesses
Charities
Recruitment agencies (agency workers paid through PAYE)
Public authorities
You must have created and started a PAYE payroll scheme on or before 28 February 2020 and have a UK bank account.
Where a company is being taken under the management of an administrator, the administrator will be able to access the Job Retention Scheme.

Employees you can claim for

Furloughed employees must have been on your PAYE payroll on 28 February 2020, and can be on any type of contract, including:

Full-time employees
Part-time employees
Employees on agency contracts
Employees on flexible or zero-hour contracts

The scheme also covers employees who were made redundant since 28 February 2020, if they are rehired by their employer.

To be eligible for the subsidy, when on furlough, an employee can not undertake work for or on behalf of the organisation. This includes providing services or generating revenue. While on furlough, the employee’s wage will be subject to usual income tax and other deductions.

This scheme is only for employees on agency contracts who are not working.

If an employee is working, but on reduced hours, or for reduced pay, they will not be eligible for this scheme and you will have to continue paying the employee through your payroll and pay their salary subject to the terms of the employment contract you agreed.

Employers should discuss with their staff and make any changes to the employment contract by agreement. When employers are making decisions in relation to the process, including deciding who to offer furlough to, equality and discrimination laws will apply in the usual way.

To be eligible for the subsidy employers should write to their employee confirming that they have been furloughed and keep a record of this communication.

Employees hired after 28 February 2020 cannot be furloughed or claimed for in accordance with this scheme.

You do not need to place all your employees on furlough. However, those employees who you do place on furlough cannot undertake work for you.

If your employee is on unpaid leave

Employees on unpaid leave cannot be furloughed, unless they were placed on unpaid leave after 28 February.

If your employee is on Statutory Sick Pay

Employees on sick leave or self-isolating should get Statutory Sick Pay, but can be furloughed after this.

Employees who are shielding in line with public health guidance can be placed on furlough.

If your employee has more than one job

If your employee has more than one employer they can be furloughed for each job. Each job is separate, and the cap applies to each employer individually.

If your employee does volunteer work or training

A furloughed employee can take part in volunteer work or training, as long as it does not provide services to or generate revenue for, or on behalf of your organisation.

However, if workers are required to for example, complete online training courses whilst they are furloughed, then they must be paid at least the NLW/NMW for the time spent training, even if this is more than the 80% of their wage that will be subsidised.

If your employee is on Maternity Leave, contractual adoption pay, paternity pay or shared parental pay

Individuals who are on or plan to take Maternity Leave must take at least 2 weeks off work (4 weeks if they work in a factory or workshop) immediately following the birth of their baby. This is a health and safety requirement. In practice, most women start their Maternity Leave before they give birth.

If your employee is eligible for Statutory Maternity Pay (SMP) or Maternity Allowance, the normal rules apply, and they are entitled to claim up to 39 weeks of statutory pay or allowance.

Employees who qualify for SMP, will still be eligible for 90% of their average weekly earnings in the first 6 weeks, followed by 33 weeks of pay paid at 90% of their average weekly earnings or the statutory flat rate (whichever is lower). The statutory flat rate is currently £148.68 a week, rising to £151.20 a week from April 2020.

If you offer enhanced (earnings related) contractual pay to women on Maternity Leave, this is included as wage costs that you can claim through the scheme.

The same principles apply where your employee qualifies for contractual adoption, paternity or shared parental pay.

Work out what you can claim

Employers need to make a claim for wage costs through this scheme.

You will receive a grant from HMRC to cover the lower of 80% of an employee’s regular wage or £2,500 per month, plus the associated Employer National Insurance contributions and minimum automatic enrolment employer pension contributions on that subsidised wage. Fees, commission and bonuses should not be included.

At a minimum, employers must pay their employee the lower of 80% of their regular wage or £2,500 per month. An employer can also choose to top up an employee’s salary beyond this but is not obliged to under this scheme.

We will issue more guidance on how employers should calculate their claims for Employer National Insurance Contributions and minimum automatic enrolment employer pension contributions, before the scheme becomes live.

Full time and part time employees

For full time and part time salaried employees, the employee’s actual salary before tax, as of 28 February should be used to calculate the 80%. Fees, commission and bonuses should not be included.

Employees whose pay varies

If the employee has been employed (or engaged by an employment business) for a full twelve months prior to the claim, you can claim for the higher of either:

The same month’s earning from the previous year

Average monthly earnings from the 2019-20 tax year

If the employee has been employed for less than a year, you can claim for an average of their monthly earnings since they started work.

If the employee only started in February 2020, use a pro-rata for their earnings so far to claim.

Once you’ve worked out how much of an employee’s salary you can claim for, you must then work out the amount of Employer National Insurance Contributions and minimum automatic enrolment employer pension contributions you are entitled to claim.

Employer National Insurance and Pension Contributions

All employers remain liable for associated Employer National Insurance contributions and minimum automatic enrolment employer pension contributions on behalf of their furloughed employees.

You can claim a grant from HMRC to cover wages for a furloughed employee, equal to the lower of 80% of an employee’s regular salary or £2,500 per month, plus the associated Employer National Insurance contributions and minimum automatic enrolment employer pension contributions on paying those wages.

You can choose to provide top-up salary in addition to the grant. Employer National Insurance Contributions and automatic enrolment contribution on any additional top-up salary will not be funded through this scheme. Nor will any voluntary automatic enrolment contributions above the minimum mandatory employer contribution of 3% of income above the lower limit of qualifying earnings (which is £512 per month until 5th April and will be £520 per month from 6th April 2020 onwards).

National Living Wage/National Minimum Wage

Individuals are only entitled to the National Living Wage (NLW)/National Minimum Wage (NMW) for the hours they are working.

Therefore, furloughed workers, who are not working, must be paid the lower of 80% of their salary, or £2,500 even if, based on their usual working hours, this would be below NLW/NMW.

However, if workers are required to for example, complete online training courses whilst they are furloughed, then they must be paid at least the NLW/NMW for the time spent training, even if this is more than the 80% of their wage that will be subsidised.

What you’ll need to make a claim

Employers should discuss with their staff and make any changes to the employment contract by agreement. Employers may need to seek legal advice on the process. If sufficient numbers of staff are involved, it may be necessary to engage collective consultation processes to procure agreement to changes to terms of employment.

To claim, you will need:

Your ePAYE reference number

The number of employees being furloughed

The claim period (start and end date)
Amount claimed (per the minimum length of furloughing of 3 weeks)
Your bank account number and sort code
Your contact name
Your phone number

You will need to calculate the amount you are claiming. HMRC will retain the right to retrospectively audit all aspects of your claim.

Claim

You can only submit one claim at least every 3 weeks, which is the minimum length an employee can be furloughed for. Claims can be backdated until the 1 March if applicable.

What to do after you’ve claimed

Once HMRC have received your claim and you are eligible for the grant, they will pay it via BACS payment to a UK bank account.
You should make your claim in accordance with actual payroll amounts at the point at which you run your payroll or in advance of an imminent payroll.
You must pay the employee all the grant you receive for their gross pay, no fees can be charged from the money that is granted. You can choose to top up the employee’s salary, but you do not have to.

When the government ends the scheme

When the government ends the scheme, you must make a decision, depending on your circumstances, as to whether employees can return to their duties. If not, it may be necessary to consider termination of employment (redundancy).

Employees that have been furloughed

Employees that have been furloughed have the same rights as they did previously. That includes Statutory Sick Pay entitlement, maternity rights, other parental rights, rights against unfair dismissal and to redundancy payments.
Once the scheme has been closed by the government, HMRC will continue to process remaining claims before terminating the scheme.

Income tax and Employee National Insurance

Wages of furloughed employees will be subject to Income Tax and National Insurance as usual. Employees will also pay automatic enrolment contributions on qualifying earnings, unless they have chosen to opt-out or to cease saving into a workplace pension scheme.
Employers will be liable to pay Employer National Insurance contributions on wages paid, as well as automatic enrolment contributions on qualifying earnings unless an employee has opted out or has ceased saving into a workplace pension scheme.

Tax Treatment of the Coronavirus Job Retention Grant

Payments received by a business under the scheme are made to offset these deductible revenue costs. They must therefore be included as income in the business’s calculation of its taxable profits for Income Tax and Corporation Tax purposes, in accordance with normal principles.Businesses can deduct employment costs as normal when calculating taxable profits for Income Tax and Corporation Tax purposes.

January 12, 2021 By Des Ingham Leave a Comment

Chair Of CBI Northern Ireland Calls For Extension Of Job Retention Scheme

Calls have been made for both an extension to the Job Retention Scheme and the removal of the business rate relief cliff edge by allocating additional funds to the Executive, in an article by Adrian Doran, the Chair of CBI Northern Ireland.

Writing in the Belfast Newsletter he also says that although we can all look forward to a better year in 2021, the pain of the last year will probably last a while longer yet.

You can read the full article at the link above but here are a few snippets from it:

No Immediate Respite On The Horizon

“For all the promise 2021 holds, those hoping for immediate respite from the pain of the past 12 months will have a bit longer to wait.

“With significant increases in transmission, and particularly a new variant of the virus emerging, the Executive’s recent announcement of tougher restrictions was as predictable as it was essential. While businesses recognise the unenviable position that policymakers find themselves in, it’s undoubtedly a bitter pill for firms to swallow as they continue to do everything in their power just to stay afloat.

“In the immediate term, we must put the health of our citizens first. That is beyond dispute. While businesses will continue to step up in the national interest to support the NHS, employees and customers in the weeks ahead, maintaining steadfast support for firms during this painful period will help ensure the recovery is delayed for as short a time as possible – as well as protecting vital jobs and firms that still teeter on the brink.

The Direct Grants Will Provide Some Relief

“It was encouraging to see the Chancellor move swiftly once again to provide additional support to companies across Northern Ireland. With demand evaporating at breakneck speed, news of more, direct grants will provide some relief to eligible companies’ cashflow, especially in some of the hardest-hit sectors. The Executive must do all it can to make sure that money quickly hits businesses’ bank accounts.

“Extending the Job Retention Scheme to end of the second quarter would provide firms with a clear line of sight, assisting planning and investment. And removing the business rate relief cliff edge in March by allocating additional funds to the Executive would create much-needed breathing space, particularly if combined with re-examining the case for VAT deferrals.

Brighter Future Within Our Reach

“While the new year may not have started with the good news we all hoped for, let me say this clearly. The end is in sight. The vaccine rollout is now underway, mass rapid testing is increasing, and a brighter future is within our reach. And with the UK set to host the important G7, B7 and COP26 summits this year, we have a unique opportunity to demonstrate our resolve, our leadership and our competitiveness to a waiting world. How we stood together, found common purpose and looked out for one another during the pandemic will stand us in good stead as we embrace the challenges and opportunities that lie ahead.”

Some very good points there from Adrian Doran which we very much agree with. We hope you enjoyed our blog today and if you need our assistance in any way please give our offices a call on 028 3752 2909.

January 11, 2021 By Des Ingham Leave a Comment

Services Sector Badly Hit As Business Activity Declines

Reports show that business activity has declined more steeply than anywhere else in the UK last month with the services sector an area that has been particularly badly hit, with bars, hotels and restaurants having a torrid time.

Increased Input Costs & Raw Material Prices

One small sliver of hope though is that the rate of job cuts was the least it has been over the last 10 months since coronavirus reached our shores, although employment figures did still fall during December. Input costs increased significantly because of higher raw material prices in the main, along with shipping costs due to problems with freight.

Positivity Due To Covid Vaccines & Brexit Deal

But there was some positivity in the business community which is down to two main points. Firstly the launch of the Covid-19 vaccines, which it is very much hoped will get enough people vaccinated by late spring to protect the vast majority of the population, so that things can return to something like normality. And secondly the last ditch Brexit deal which is a huge boost to the Northern Ireland economy.

Ulster Bank chief economist Richard Ramsey is quoted in the Belfast Telegraph today, saying:

“Northern Ireland’s private sector ended 2020 the way it began the year with business activity contracting at the same pace in December as in January (46.8),” he said.

“The local economy experienced six months of contraction during the first half of 2020, including the record rates of decline across a range of indicators in the second quarter.

“Indeed, some of the PMI indicators hit single-digits, a feat that was unheard of prior to the pandemic and the use of lockdowns.”

He said there had been a “robust rebound” in the third quarter.

“However, this recovery was shortlived and faltered as renewed lockdown restrictions triggered three months of contraction during the final quarter of the year,” he added.

“Meanwhile, export orders notched up their 23rd successive month of decline,” he said.

“The one area where growth is accelerating is inflation.

“Input costs rose at their fastest pace since August 2018 with inflationary pressures most marked amongst manufacturers.

“In turn, firms are passing on these higher costs, such as freight and raw materials, to their customers. As a result the selling prices of goods and services are rising at their fastest rate in almost two years.”

There Were Grounds For Optimism In The Services Sector

Mr Ramsey did believe that, although the services sector had recently been badly affected, there were plenty grounds for optimism that this sector would bounce back strongly during the course of 2021. He also said that there would be expected teething problems with trade across the Irish sea until the new trading arrangements are properly bedded in.

That`s it for todays blog, in the meantime if you require any help with any accountancy issues please give our team a call on 028 3752 2909 and we will be only too happy to be of service to you.

January 5, 2021 By Des Ingham Leave a Comment

Northern Ireland Executive To Receive £127m In Support Of Businesses

The Chancellor of the Exchequer Rishi Sunak has announced that Northern Ireland will receive a total of £127 million in a bid to keep businesses in the retail, hospitality and leisure sectors afloat, as all parts of the UK settle into some form of lockdown for the next few weeks at least.

Business Relief Packages

This money will help to support businesses badly affected by the pandemic and the subsequent restrictions, with the Chancellor saying that he will review whether any support packages will need extending when the first Budget of the year comes round on March 3rd.

New Strain Of The Virus Presents A Huge Challenge

Here is what Chancellor Sunak said, as quoted on the Q Radio website:

“The new strain of the virus presents us all with a huge challenge – and whilst the vaccine is being rolled out, we have needed to tighten restrictions further.

“Throughout the pandemic we’ve taken swift action to protect lives and livelihoods, and today we’re announcing a further cash injection to support businesses and jobs until the spring.

“This will help businesses to get through the months ahead – and crucially it will help sustain jobs, so workers can be ready to return when they are able to reopen.”

And on the possibility of further support down the line, in particular over business rates relief and sick pay improvements, he said:

“We’ll have a Budget in early March, where we’ll take stock of all the various support that we’ve put in place, including today’s announcement of cash grants, and then review and set out the next stage of our economic response to coronavirus at that point.”

Current Lockdown Major Blow To The Business Community

The current lockdown is yet another blow to businesses and the economy as a whole here in Northern Ireland and the rest of the UK. But the government really had no choice in the matter as the new variant of the virus is spreading at a much faster rate than previously, which of course is a major health concern.

Everything must be done to beat the virus, so keeping people as isolated as possible from one another until the vaccines are fully rolled out is really the only course of action to take. However it is crucial that all businesses are given the financial aid required to support them through this lockdown period. The financial packages need to be transferred to the business community as quickly as it is humanly possible, as time is not on the side of many of them, and any delay could have disastrous consequences.

January 4, 2021 By Des Ingham Leave a Comment

NI Chamber President Urges Businesses To Face Changes Head On & Remain Flexible

In a New Year address the President of Northern Ireland Chamber of Commerce & Industry, Ian Henry, has urged businesses to stay focused on meeting the formidable challenges ahead, which include dealing with the changes brought upon by Brexit and the ongoing trading restrictions due to the Covid-19 pandemic. He believes that businesses will have to be flexible and remain fleet of foot to survive and thrive in 2021.

Rethinking Tried & Trusted Business Models

He was quoted in an article by Emma Deighan in the Belfast Telegraph today, saying that businesses would grappling “with the changes brought by Brexit and further Covid-19 restrictions, with many having to rethink tried and trusted business models, supply chains and market strategies”.

He went on to say in the article that:

“2020 has been a year of disruption and frustration for so many businesses. As we enter 2021, businesses begin the year operating yet again under enhanced restrictions as a result of Covid-19.

“Our members want to be able to open without interruption, for their customers and suppliers to be able to come and go freely, for trade to recover and for confidence to return but we must do this safely and within the guidelines.

“Without a doubt, the arrival of mass vaccination gives our business communities hope for a better year in 2021.

“Even with a Brexit deal, firms face an enormous amount of change in terms of how they trade. Responsibility rests squarely with the UK government to provide crystal-clear guidance that lets businesses plan into 2021 and beyond. The alternative is a new year that begins with even greater turbulence for supply chains, trade and markets – and higher costs for us all, leaving us with a disadvantage.”

Businesses Trading Globally In 2021

On the ability of businesses to trade globally he said: “The expected digitalisation of work has been rapidly accelerated. There is now a need to amend the curriculum for subjects at all levels to include ‘systems skills’ such as ICT and data analytics alongside ‘human skills’ like empathy and strategy. We must invest in languages to support international trade, focusing most on those used in growing economies like Asia. The government must also urgently prioritise the retraining of young people within disrupted industries for other opportunities.”

“As they have done throughout the pandemic, business people are ready and willing to work collaboratively with the public, private, academic and voluntary sectors to build back a thriving economy for all.

All Sectors & Departments Must Work Together

“We call on the UK and Irish governments, the NI Executive and local authorities, academia and the voluntary sector to work together, regardless of location or political background, to make a better future a reality.”

He concluded: “With the New Year comes renewed energy and hope that the next 12 months will provide companies with the certainty, conditions and support they need to prosper.”

At WHR Accountants we are also here to give support to businesses in Northern Ireland. For more details on our range of business services give our team a call on 028 3752 2909.

December 29, 2020 By Des Ingham Leave a Comment

6 Week Lockdown Brings More Challenges To Businesses

Here we are between Christmas and New Year and we are now into the 6 week lockdown period that has been introduced in Northern Ireland. For many businesses the days just after Christmas are one of their most profitable times of the year as they launch sales and people go out to the high street in their droves to spend any money they have been given as a gift.

Non Essential Shops Closed

Unfortunately those shops classed as non essential will be closed over these 6 weeks, so they are going to find these weeks extremely challenging indeed.

This first week of lockdown is particularly stringent. A form of curfew is in operation after 8pm, all shops will be closed from that time each evening along with any close contact services and all gatherings, whether they be indoor or outdoor, will be prohibited until 6am on the next day.

During the whole 6 week lockdown the whole hospitality industry will be shut down apart from takeaways and deliveries. All retail deemed non-essential will be closed, even for click-and-collect services. Close contact services, which include such as hair salons and beauty parlours, will not be able to operate during this 6 week period.

More Virulent Strain Of Coronavirus

The latest strain of the coronavirus seems to be far more virulent than previous strains, which seems to be behind the increasing infection rate across Northern Ireland and the rest of the UK. Thankfully it does seem that the vaccines produced to counter the virus will be just as effective on this new strain and also it does not appear any more dangerous than previous strains to the human body, however because it is so infectious it is going to put even more pressure on the health services. Because of all this a lockdown seemed pretty inevitable and indeed this has what has come to pass.

A Difficult Start To 2021

So the start of 2021 looks like it will be just as difficult for the business community as the vast majority of 2020 has been. There is no doubt that we are laying all our future hopes on the vaccines being produced, which we all hope and pray will be effective in protecting the community from the virus so that once rolled out to the majority of the population we can get back to our normal daily lives.

This is our last blog until next year so we would like to wish all our customers and readers a happy, safe and prosperous New Year!

December 21, 2020 By Des Ingham Leave a Comment

Merry Christmas To All Our Clients

Firstly we would like to take the opportunity to wish all our clients, and anyone reading this blog article, a safe and peaceful Christmas and a happy and prosperous New Year.

A Challenging Year

As we spoke in our last blog, 2020 has certainly been a challenging year for us all. When news started coming out of China at the start of the year that a new virus had emerged, no-one could have predicted what a devastating impact it would have on the whole world, with thousands dead and economies brought to the brink.

At the time our government officials seemed pretty unconcerned by the issue, saying we had a robust system in place to deal with any outbreaks. Unfortunately this turned out to be far from the truth and we have been battling this extremely contagious virus ever since.

New Coronavirus Variant At Large

It is believed that the latest variant of the coronavirus, which appears to be around 70% more transmissible, is also at large in Northern Ireland, which if this is true will undoubtedly lead to a big increase in infections.

So now we have a new 6 week lockdown looming in Northern Ireland, which comes into force on December 26th straight after Christmas, with the hope that this will stem the rate of transmission long enough to get as many people as possible vaccinated in the intervening period.

Vaccines A Ray Of Hope

Thankfully we have the ray of hope provided by the effectiveness in trials of the vaccines being produced to prevent people getting Covid-19. As we move forward into 2021 let`s hang onto that hope!

Finally just a reminder that we will be closing for the festive period on December 22nd and will not be re-opening until Monday 4th January. Hope you and your family stay safe and healthy.