As anticipated the furlough scheme has been extended until the end of September 2021. Employees will continue to be paid 80% of hours not worked up to this date. From 1st July employers will have to contribute 10% (so they will pay employees 80% and claim back 70%) and for August and September employers will contribute 20 % (so pay employees 80% and claim back 60%).
We will confirm details of reference periods and look back dates once HMRC guidance has been updated.
SELF EMPLOYED INCOME SUPPORT SCHEME
This has also been extended to the end of September. From April claims can be made for a 4th grant worth 80% of 3 months average trading profits (up to £7,500 in total).
This will be followed by a 5th grant later in the year.
More people will be able to claim as it will include tax returns filed up to midnight on 2nd March 2021. Claims will be based on turnover lost, people whose turnover has fallen by less than 30% will receive a grant equivalent to 30% of average profits.
The additional £20 per week top-up for Universal Credit will continue for another 6 months but will be paid as a one-off payment of £500.
INCOME TAX AND NATIONAL INSURANCE
There will be no increase to the rates of income tax or National Insurance. The rates and threshold changes announced previously (detailed on our last payroll newsletter) will go ahead but the thresholds will then be frozen for five years.
Corporation Tax on company profits will rise from 19% to 25% in April 2023. The rate will be kept at 19% for smaller companies with profits under £50,000 and will then be tapered.
VAT – No change to general rate. VAT Rate for hospitality firms to be maintained at the reduced rate of 5% until September. Interim rate of 12.5% to apply for following six months.
Business Rates – holiday to continue for firms in England until June 2021 followed by 75% discounts.
Restart Grants – £5bn in restart grants will be available for shops and other businesses forced to close. £6,000 per premises for non-essential outlets due to reopen in April and £18,000 for gyms, personal care and other hospitality and leisure businesses.
Super Deduction – Firms will be able to deduct 130% of investment costs from their tax bills
Incentive Grants – for apprenticeships will rise to £3,000
New Visa Scheme – to help start-ups and rapidly growing tech firms to source talent from overseas
Starter Checklist – HMRC have issued the new Starter Checklist that needs to be used for new employees from 6th April 2021. It’s available to download here Starter checklist (publishing.service.gov.uk). If you use your own version on a starter form, please update to include Student Loan Plan 4
Gender Pay Gap Reporting – Due to the impact of Covid 19 the Equality and Human Rights Commission (EHRC) have announced that enforcement of gender pay gap reporting for the 20/21 reporting year (snapshot date 31/03/20 or 05/04/20) will not begin until 5th October 2021. They encourage employers to report ahead of usual deadlines (30/03/2021 and 04/04/2021) where possible but will not take enforcement action as long as the reports are provided by 5th October 2021.