Pay Less Tax – Winter 2024 Edition
Over the last few weeks, a number of announcements have been made in respect of the financial support available for businesses.
Self Employed Income Support Scheme
Applications for the second and final grant are now open. You can make your claim from the date HMRC give you. If you’re eligible and your business has been adversely affected on or after 14 July 2020, you must make your claim for the second grant on or before 19 October 2020.
The second and final taxable grant is worth 70% of your average monthly trading profits, paid out in a single instalment covering 3 months’ worth of profits, and capped at £6,570 in total.
HMRC will work out your eligibility for the second grant in the same way as the first grant.
Please be aware that you can make a claim for the second grant if you’re eligible, even if you did not make a claim for the first grant.
D2N2 Grants To Boost Small Business Recovery
The Government recently announced a support package of £20 million specifically aimed at SMEs to help them recover from the effects of the Coronavirus pandemic.
The funding will come in the form of a grant from between £1,000 – £5,000 which can be used to support the following activities:
- Access to technology or new equipment in order to diversify
- Access to professional advice such as HR, legal or financial to aid in business decision making and risk management
Locally the D2N2 Growth Hub will be managing the applications and they are currently working hard to finalise the application process for these grants and will provide further information on the eligibility criteria as soon as it’s available.
It is anticipated that these grants will become available at the end of August, however, companies can lodge their interest now using this form
Coronavirus Job Retention Scheme Updates
From 1 September 2020, the government will pay 70% of wages up to a cap of £2,187.50 for the hours the employee is on furlough. Employers will top up to ensure the employee receives 80% total up to a cap of £2,500 for furloughed hours. Employers will pay in full for the hours they work at the employees normal rate of pay, and all ER NICs and pension contributions.
From 1 October 2020, the government will pay 60% of wages up to a cap of £1,875 for the hours the employee is on furlough. Employers will top up to ensure the employee receives 80% total up to a cap of £2,500 for furloughed hours. Employers will pay in full for the hours they work at the employees normal rate of pay, and all ER NICs and pension.
The Coronavirus Job Retention Scheme will close on 31 October 2020.
Please note If an employee is flexibly furloughed then any hours taken as holiday during the claim period should be counted as furloughed hours rather than working hours.
Employees should not be placed on furlough for a period simply because they are on holiday for that period. Working Time Regulations require holiday pay to be paid at the employee’s normal rate of pay or, where the rate of pay varies, calculated on the basis of the average pay received by the employee in the last 52 working weeks. Therefore, if a furloughed employee takes holiday, the employer should pay their usual holiday pay in accordance with the Working Time Regulations.
The Chancellor has confirmed that employers will be paid a job retention bonus of £1,000 for each employee they bring back to work from furlough. The bonus will be paid from February 2021. Detailed guidance will be published in September, including guidance on how employers should claim for the bonus. Bonuses will only be paid for employees that were eligible for the scheme and HMRC have made it clear that they will withhold payment where it believes there is a risk that furlough claims may have been fraudulently claimed or inflated, until their enquiries are completed.
To qualify for the bonus, the employee would need to remain continuously employed through to the end of January 2021 and earn an average of £520 per month over that period (this is the lower earnings limit for qualifying for certain benefits). The employee must have earned something during each of these months, and only earnings recorded through HMRC Real Time Information (RTI) records can be counted.
A bonus will not be paid for any employee who is serving a contractual or statutory notice period that started before 1 February 2021, even if they are still employed on 31 January. As well as affecting employees who have been given notice of dismissal before this date, this means that an employer may lose out on the bonus if an employee resigns shortly before it would have become payable.
The government is introducing a new Kickstart Scheme to fund the direct creation of high-quality jobs for young people at the highest risk of long-term unemployment. It will give young people the chance to build their confidence and skills in the workplace, and to gain experience that will improve their chances of going on to find long-term, sustainable work. This will sit alongside a guaranteed foundation of support through an expanded Youth Offer delivered through DWP, providing a range of targeted support to help young people find lasting work. A £2 billion fund has been ring-fenced to high quality 6-month work placements aimed at those aged 16-24 who are on Universal Credit and are deemed to be at risk of long-term unemployment. Funding available for each job will cover 100% of the relevant National Minimum Wage for 25 hours a week, plus the associated employer National Insurance contributions and employer minimum automatic enrolment contributions. Further details are expected to be announced later this month.
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