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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.

August 4, 2020 By Des Ingham Leave a Comment

BT Launches Their Small Business Support Scheme

It is good to see that BT have announced the launch of their Small Business Support Scheme in Northern Ireland, which will help firms boost connectivity, cash flow and confidence as the country looks to get back on its feet again post lockdown.

Helping Small Businesses In Northern Ireland Recover

This package of support is a bid to help 124,000 small businesses in Northern Ireland recover and grow once more as we move towards Brexit.

Paul Murnaghan, director of BT`s Enterprise business in Northern Ireland, is quoted as saying in an article on the Love Belfast website:

Small Businesses The Beating Heart Of Our Economy

“Small businesses are the beating heart of our economy, high streets and communities. The past few months have been amongst the most challenging in living memory for SMEs. As they employ the majority of private sector workers here, their success is key to securing Northern Ireland’s economic recovery from the pandemic. Small businesses deserve the support of each and every one of us to help them thrive into the future.

“At BT, we can use our technology, scale and expertise to help small businesses kick-start recovery and growth by boosting their connectivity, cash flow and confidence. So we’ve listened to the needs of small businesses and are stepping up to deliver a support scheme which should have something for everyone – whether you’re a sole trader, tech-start up, micro business or a larger firm.”

Supporting Local SME`s Through Tough Times

And in the same article Ann McGregor MBE, Chief Executive of the Northern Ireland Chamber of Commerce and Industry, added:

“The past few months have been amongst the most challenging in living memory for businesses and BT’s commitment to supporting local SMEs through these tough times will be particularly welcome by the sector.

“The Small Business Support Scheme is directly targeted at a number of the pressure points facing businesses now. Its assistance with relieving cash flow pressures for suppliers and improving digital skills across a wider business base is extremely important. As thousands of businesses here look to digitally transform operations and how they service customers, BT’s continued focus on connectivity is also going to be central.

“I encourage small businesses from every sector across Northern Ireland to take advantage of the expertise and support on offer.”

The Support Scheme will help businesses with:

Funding ultrafast business connections

Launching bursaries for UK tech start-ups

Introducing BT Halo for Business

Helping small businesses to go cashless

Accelerating payment for BT’s small business supplier

Financial flexibility for the hardest hit

Helping small businesses access the full power of digital and social media advertising

Supporting small businesses through mentoring

Helping small businesses acquire new digital skills

Wellbeing support

This is excellent news for small businesses in Northern Ireland and the economy as a whole. Let`s hope this is a great success and it helps many small businesses on the road to recovery.

In the meantime if you need any help on any accountancy related issue do not hesitate to get in touch with our offices by calling us on 028 3752 2909.

August 3, 2020 By Des Ingham Leave a Comment

Helping Businesses Through Difficult Times

WHR Accountants have been trading for many years now, 35 years to be precise, and seen many other accountancy firms across Northern Ireland come and go. The longevity of our business we believe is due to quite a few factors, such as excellent customer service and a great knowledge of the many areas of accountancy that we work in. But the most important factor is that we get results for the clients that we work with. If we didn`t provide value for money then there is no way that we would have survived for all this time.

The Help Of A Professional Accountant

Right now businesses in Northern Ireland need the help of a professional accountant more then they have ever done before. Many businesses are struggling to keep afloat due to the Covid-19 pandemic which has decimated trade in so many sectors of our economy, so business owners need to spend all their time on looking after the nuts and bolts of their business and let an accountant look after the other areas such as bookkeeping, auditing, PAYE, taxation, business planning and funding etc etc.

Seeing Through All The Red Tape

Not only have businesses had to deal with the coronavirus crisis, but they also have Brexit looming up on the horizon and all the changes this could entail. They need an accountant in their corner so that they can help with the transition, find ways of overcoming any problems and ensure that they can see through all the red tape that will inevitably have to be dealt with. It will be a difficult time but with the right help and support I am sure that the majority of businesses will come out of the other side even stronger than they are now.

Having An Expert To Guide Your Business Through

If businesses try to go it alone and be a jack-of-all-trades they often find that they just get bogged down in all the details, take their eyes off the ball and end up with severe financial issues that they could find hard to overcome. It is always easier when you have someone who is an expert in a particular field to guide you through those relevant processes and that is what we could provide for you here at WHR Accountants.

If you are a business owner or manager and you feel you need some expert advice on any accountancy related issue please give our offices a call here in Armagh in the first instance by ringing 028 3752 2909, we will be very glad to speak with you.

July 28, 2020 By Des Ingham Leave a Comment

5 Good Reasons To Hire An Accountant

Today in our blog we thought we would share with you 5 reasons why you should hire an accountant to help you with your business. Accountants aren`t just there for you once a year when your tax becomes due, they can act as a consultant for you all year round, helping with the smooth, regular running of your business.

Reasons For Hiring An Accountant

Here are the 5 reasons, taken from an article on the Simply Business website:

If you’re unsure about your taxes
For some, taxes can be a nightmare. Complicated forms, hefty late fines – in fact, knowing your IR35 from your R40 (and the hundreds of other codes) is near enough impossible, unless you’re an expert.

Hiring an accountant to deal with your taxes can be a simple way to make sure you avoid any late payment fines, while they could also save you money in terms of how much tax you actually need to pay.

If you’re struggling for time
Running a full-time business takes time. And lots of it.

Outside of your usual business hours you might be ordering stock, striking up new business or taking care of your website.

On top of this, it’s important that your work-life balance works for you, and spending time relaxing with family and friends should be part of any business owner’s schedule.

Sorting your taxes and organising your finances are just extra tasks on that never-ending to-do list, and if your time is stretched as it is, hiring an accountant to deal with this side of your business could be worthwhile.

If you want help with financial planning
Unlike bookkeepers who will generally take care of invoices, payroll and the like, an accountant should help their client plan for the future, by understanding their finances and the future landscape.

Sound financial planning and budgeting is crucial when it comes to the growth of your business, and can help with understanding things like when to hire an employee, how much work you can manage, and whether to adjust your rates.

Financial planning is especially important if you’re self-employed, as getting this wrong can impact your professional and personal life.

If you’re looking to be introduced to like-minded businesses
Aside from helping with your finances, accountants can be a fantastic source of networking opportunities.

Doing the job they do means they’ll speak to numerous business owners on a daily basis, from a variety of professions.

It could be anything from an experienced peer in the same line of work to a marketing consultant who could give your business a boost – accountants are a great way to make industry connections and grow your network.

If you’re worried about staying legal
Accountants can also help when it comes to keeping your business on the right side of the law.

The self-employed are regulated by a lot of different legislation, and understanding it all could be tricky. For example, some business owners fail to take out employers’ liability insurance for their employees, despite this being the law.

They can also help when it comes to deciding which legal structure is right for your business. If you’re currently a sole trader, they may inform you that you’d be wise to switch to a limited company set-up. Aside from moving liability away from your personal finances, this can sometimes also help cut costs and increase your profitablity.

If you need help from an accountant give our offices a ring here at WHR Accountants at the earliest opportunity on 028 3752 2909.

July 27, 2020 By Des Ingham Leave a Comment

Large Spike In Insolvency Registrations Feared In September

There seems to be a general consensus that once the courts in Northern Ireland reopen again after the summer recess that there will be a large spike in the number of businesses filing for insolvency.

The Courts Were Closed Due To Coronavirus Crisis

During April and May the courts were closed due to the coronavirus crisis so businesses were not able to file for insolvency. Whether that was a good or bad thing is a moot point, but at least it gave time for businesses to consider their options and make some sort of plan, however flexible it had to be, for the future.

In fact, in Northern Ireland, there were just 28 business insolvencies between March 24 and June 30th of this year, which compares favourably to the previous year when there were more than 100.

In Belfast just nine companies went to the wall compared with 56 the previous year, and only in Newry, Mourne and Down did the numbers rise up from four to seven.

Could September See A Wave Of Insolvencies

But although the Chancellor of the Exchequer Rishi Sunak has made big efforts to save large parts of the economy through the creation of the furlough scheme, this scheme is slowly coming to an end. So September could be the time when some companies decide they can no longer carry on trading in the present economic circumstances and file for bankruptcy.

The big worry is that there could be a huge number of businesses folding in September which would be a huge, huge blow to the economy and more importantly people`s livelihoods here in Northern Ireland. The economic and social impact this would wreak would be with us for many years to come.

On A Positive Note New Businesses Are Starting Up

On a more positive note many new businesses have started up over the same period, with over 2,000 companies registered over here between April and June. At least the entrepreneurial spirit is very much alive and kicking here in Northern Ireland and many people are finding new, creative ways to make a living. Hopefully many of these new businesses will grow and thrive and take up some of the slack with employing people who may lose their jobs as some other businesses fold.

At WHR Accountants we have helped many start up businesses to find their feet, helping with all the start up procedures, a business plan, their taxation and general accountancy issues. We have helped them to get off to a successful start and later to grow and prosper. So if you have a new business, or you are thinking of starting up one in the not too distant future, get in touch with the WHR team and we will be glad to offer you our advice. Contact us on 028 3752 2909.

July 22, 2020 By Des Ingham Leave a Comment

Will Mandatory Wearing Of Face Masks Damage The Retail Sector?

From July 24th it will be mandatory for customers to wear a face mask in shops in England, and in fact it is already compulsory to wear one in Scotland. Now the chief medical officer in Northern Ireland, Dr Michael McBride, has come out in support of this rule.

Protect Vulnerable People Who Have Been Shielding

He believes that once the shielding period for vulnerable people ends on July 31st it is important to protect them from the virus in any way we can and give them the confidence to go out into the shops, so the mandatory wearing of face masks will be a positive step towards this process.

Will It Be A Further Blow To The High Street

However there are critics of the mandatory wearing of masks, with some MP`s and retail shops claiming the introduction of this will be a further blow to the high street. They fear that this rule will drive many consumers away from the retail shops and into the arms of the online giants such as Amazon, which would be a further blow to the local high streets who are already struggling to get up and running after lockdown. They also say that the compulsory wearing of face masks should have been introduced months ago if it was going to be introduced at all when the pandemic was at its peak.

Reduce The Risk Of Further Waves

Dr Michael McBride is quoted on the BBC News NI website as saying:

—- “That means us doing the right thing and using a face covering in enclosed spaces, and also reducing the risk of further waves in autumn and winter,” he said.

“It is the right thing to do and proper and respectful thing to do – we need to change the behaviour now, we need to get public used to them, the time is now.

“I would like to see us take all steps necessary to ensure by 31 July, many more of us are wearing face coverings we have a duty to ensure that’s the case,”

“I was not convinced from the outset but there is greater evidence now – not protecting me as the wearer of the face covering, or you as the wearer of the face covering, but actually the benefit of protecting other people.

“Right from the outset our approach has always been to protect others, to protect others who are more vulnerable than us and to protect our health service and we need to continue to do that,”

We fully support all measures that will safeguard the people of Northern Ireland from this virus, but we hope that any measures are introduced carefully so that they do not damage businesses here and the Northern Ireland economy as a whole.

July 21, 2020 By Des Ingham Leave a Comment

Calls For Northern Ireland Businesses To Get `Brexit Compensation`

A group of MP`s are calling for businesses in Northern Ireland to get adequate funds to compensate them for the cost of trading when Brexit is finally delivered. They say that as it will cost them millions of pounds in trading costs when trading with other firms in Great Britain it is only fair that they should receive some form of compensation to help them carry on trading.

Checks & Controls On Goods Coming In

As businesses are aware they face checks and controls on all goods coming from the rest of the UK, starting in January, and there could even be checks when goods are headed in the opposite direction which will incur even more costs.

Businesses Must Not Face New Upfront Costs

A report by the Northern Ireland affairs select committee is quoted in a Guardian article by Lisa O`Carroll as saying: “We are clear that UK businesses trading across the Irish Sea must not face new upfront or ongoing costs, as these would not be compatible with the government’s commitment to unfettered access and to maintaining Northern Ireland’s integral place in the UK internal market,”

The report also goes on to say that: “We remain to be convinced that the government fully understands that its political approach, apparently informed by limited understanding of how business works, provides neither the clarity nor the detail that Northern Ireland business requires.”

Government`s Approach Risks A Perfect Storm

In the same article Shadow Northern Ireland secretary Louise Haigh is heavily critical of Boris Johnson`s government, saying: “The government’s careless approach risks a ‘perfect storm’ for Northern Ireland with businesses unprepared for major new requirements with their largest trading partner, at a time when they are fighting to stay afloat during the Covid-19 crisis,”

There doesn`t seem to be a great deal of joined up thinking going on, with the Brexit split looming ever closer on the horizon. The Covid-19 crisis has meant that all efforts have been focused on this, to the detriment of most other things, including a Brexit deal and all that entails, which is more critical for Northern Ireland than any other part of the UK. Let us hope that help is at hand for businesses here in Northern Ireland, as they have had enough to contend with over the last few months.

As ever we are here to help businesses with all their accountancy needs and the smooth running of their business. If you need any help from a professional, expert accountancy firm get in touch with WHR Accountants on 028 3752 2909.