Whilst we are waiting for more details on the small business funding offered by the Government we thought we would give you more information on Staff and HR…
Homeworking for employees
Employers may want to start considering whether it would be possible for employees to work from home. Some employers will already have a business continuity plan in place and the capacity for their employees to do their job at home which will help to keep business disruption to a minimum.
Employers that haven’t considered home working before should consider carrying out an assessment if home working is expected to take place for an elongated period of time. This will allow employers to review other health and safety considerations and ensure that employees have the necessary equipment for such activities.
Paying employees who have been medically advised to self-isolate
This has been an area of confusion for employers because employees in isolation are often fit for work and have argued that they should receive full pay. However, the health secretary has stated that employees who have been medically advised to self-isolate are staying away from work for ‘medical reasons’ and should receive sick pay, this position has since been confirmed by the Chancellor in his budget speech and Statutory Sick Pay regulations confirm that this should be the case. Periods of self-isolation should be treated as sickness absence and paid accordingly.
The government has announced that Statutory Sick Pay for any COVID-19 related sickness absences will be paid from the first day of sickness absence instead of the fourth day as is usually the case for SSP. Emergency legislation to implement this change is anticipated, it is not yet known whether this change will have retrospective effect to cover sickness absences which started before the legislation is passed. Guidance will be updated when the draft legislation is available.
Employees insisting on coming to work after being advised to self-isolate
You can tell an employee not to come into work if they have been advised to self-isolate as doing so could potentially be putting other employees at risk. Self-isolation absence from work is absence for medical reasons and should be treated as sick leave so the employee should be paid accordingly.
Advising employees who aren’t sure if they should be self-isolating
Employees should be advised to seek clarification from NHS 111 if they are unsure whether self-isolation is necessary. The government has asked that these enquiries are directed to the online service rather than the telephone service. It is important that employees seek this advice before reporting for work.
Can you pay employees full pay if they have been advised to self-isolate?
You can exercise your discretion as an employer to pay full pay in these circumstances which can be helpful in retaining employee engagement during this difficult time. If you decide to exercise your discretion in this way, you should be aware that you must do so consistently and consider that the number of self-isolation cases is likely to increase significantly. This is likely to be further impacted by the Prime Minister’s announcement that anyone with an increased temperature and/or new and continuous cough should enter a 7-day self-isolation period which has been extended to anyone who lives in the same household as someone suffering with these symptoms. The burden on the employer if a policy of full pay were to be consistently applied would need to be carefully considered. If you are not consistent and give full pay to some but not others, this can not only cause resentment among employees but could also lead to discrimination claims.
Employees who have recently returned from an area with confirmed cases of COVID-19 but don’t fall within guidelines to self-isolate
One of your fundamental duties as an employer is to safeguard the health and safety of your employees which should be achieved by following government guidance on COVID-19, this is reviewed regularly and is updated daily at 2:00pm. If the guidance does not require your employee to self-isolate then they should pose no realistic risk to the rest of your workforce. If you are in any doubt then it is reasonable to ask them to check their position by accessing online advice from NHS 111. You could ask them to self-isolate if you wanted to be extra cautious but you would have to pay them full pay as there is no evidence to suggest medical reasons for doing so.
Changes to the Statutory Sick Pay scheme
These are the 3 key changes being introduced to the SSP scheme in relation to COVID-19 periods of sickness absence.
1) When it is payable – Statutory Sick Pay is usually payable from the fourth day of sickness absence but the government has announced that it will be paid from the first day of sickness absence for COVID-19 related sickness absences.
2) Introduction of a rebate system to repay up to 2 weeks Statutory Sick Pay per employee for COVID19 related sickness absences for employers with less than 250 employees as at 28 February 2020.
3) The NHS 111 service will be able to provide an alternative to a GP fit note providing evidence of the reason for sickness absence.
Casual workers on zero hour contracts and SSP
Workers with average weekly earnings of at least £118 (before tax) calculated over a pay reference period of at least 8 weeks may be entitled to Statutory Sick Pay.
To check whether someone meets this threshold, take the last normal pay date before the first complete day of sickness absence and count back to the last normal payday falling not less than 8 weeks from that date. Calculate all earnings within that period and calculate the weekly average on that basis, if the figure is at least £118 then they will be eligible for Statutory Sick Pay.
Paying employees who have been off ill with COVID-19 but haven’t provided a fit note
Employees can self-certify sickness absence for the first 7 days, after that period an employer can require them to produce a fit note from their doctor confirming they are unable to work. However, government advice in respect of COVID-19 is that employees should self-isolate for 14 days and not attend their doctor’s surgery during that time which makes it impossible for them to obtain a fit note. Guidance states that employers should exercise their discretion and not require a fit note to cover this period. Sick pay should not be withheld in the absence of a fit note as this would seem unreasonable in these particular circumstances. If employers require proof for the reason of sickness absence, the Chancellor has announced that employees can obtain this from the NHS 111 service and that this will be acceptable as an alternative to a fit note.
Someone with a confirmed case of COVID-19 has recently been in the workplace, what do you do?
The closure of the workplace in these circumstances is not recommended following government guidance. Public Health England’s local protection team will be in contact with the employer to discuss the case, find out who has been in contact with the individual and advise on actions which should be taken. This may include any necessary quarantine arrangements and cleaning of communal areas.
If you have been advised to close your business
You should close your business if you have been advised to do so. If an employer is unable to provide work, they must usually pay their employees in full. However, if you have a contractual right to lay off without pay, you could rely on this meaning that your employees would only be entitled to payment of statutory guarantee pay for the first 5 workless days which will be their normal rate of pay subject to a statutory maximum of £29 per day. This is pro-rated for part-time employees.
If you do not have a lay off provision in your contract, you could ask your employees to agree to a temporary variation of contract to allow this.
Employees that can’t come to work because their school/nursery is closed
Employees have a legal right to take time off to deal with emergencies relating to their dependents and this includes the unexpected disruption of arrangements for the care of a dependent. In this particular context, a dependent could be the employee’s:
Usually this time off is unpaid unless your business provides additional contractual benefits to employees in these situations.
Keeping employees safe
Employers should be taking reasonable steps to reduce the risk of people spreading illness at work. It is sensible to review current hygiene practices and remind your employees of the following:
Employees living in the same house as someone who is self-isolating
If someone in the same house is self-isolating because they’re suspected to be infected or are infected with the virus then it’s likely that your employee will have been medically advised to self-isolate by NHS 111 or the local public health team which would be classed as coming into close contact with an infected person. The employee should not come to work if this is the case and the period of self-isolation would be treated as sickness absence.
Recovering SSP for COVID-19 related sickness absence
The Chancellor announced in his Budget speech that businesses with less than 250 employees will be refunded for the cost of providing SSP to employees who are off work for up to 2 weeks because of the virus. The briefing notes for the Budget reveal the following details for the rebate scheme:
Self-employed people working for your business, self-isolating and SSP
Those who are genuinely self-employed have no entitlement to SSP. In the Chancellors budget speech he announced that those individuals could obtain financial relief by applying for benefits such as Contributory Employment and Support Allowance (ESA) and Universal Credit.
Relief to businesses struggling with the impact of COVID-19
There are several measures being offered to help businesses to cope with the impact of COVID-19 including:
In full-filling our mission, we’ll get to know you and your business and what it is that is important to you. We like to build a close and honest relationship with our clients in which we can inspire, challenge and support you to achieve your goals. We provide the best advice and friendly environment for you to discuss and consider your options.
Get the latest updates and offers.
If you are self-employed then you usually pay two types of National Insurance:
– Class 2 if your profits are £6,515 or more per year;
– Class 4 if your profits are £9,568 or more per year.
If you’re employed by your own business (i.e on the payroll) then there’s a different class of national insurance that you pay.
As an employer, you also pay Employer’s National Insurance which is just over 13% for most employees.
In lots of ways, National Insurance can appear more complex than income tax and the only way to get an accurate picture if what you need to pay is to talk with us about your specific situation.
Dividend tax is a new tax that was introduced in 2016 and is the tax on the dividends you receive.
You get a very small tax-free allowance, which is currently £2,000 pounds per year.
If you’re a standard rate taxpayer then the Dividend Tax rate is currently 7.5%.
If you’re a higher rate taxpayer then Dividend Tax is 32.5%.
From April 2022 tax on dividend income will increase by 1.25% to help support the NHS and social care.
Yes, you can employ casual labour, as long as they earn less than the current National Insurance, threshold which is currently £120 per week.
If they’re earning more than that then they have to pay National Insurance and so must go on the payroll.
Phase 1 of HMRC’s Making Tax Digital for VAT comes into effect from April 1st 2019 meaning businesses with turnover above £85,000 must change how they prepare and file VAT returns. For those affected:
– HMRC’s online VAT portal will close from April.
– VAT returns must instead be submitted to HMRC through MTD software.
– Businesses must digitally record their VAT transactions and returns using MTD software.
It’s compulsory and affects all businesses.
Corporation Tax and Self Assessment will also be impacted by Making Tax Digital in 2020 and beyond.
Because as long as they’re measuring how they’re performing against a budget, they’re able to make better decisions, sooner.
So businesses with budgets know, every month if something’s going wrong in the business – so they can address the issue and solve it. They’re on top of it. They can react and improve things. Which is why we help most of our clients put effective budgets in place. They make a big difference.
Well, the key to making more profit is to do one or more of the following:
– get more customers;
– increase your prices;
– get customers to come back and buy more often;
– reduce your costs
Which one (or two!) of these to focus on will differ for each business depending on a whole host of factors – which is where a good accountant can usually help.
You don’t have any choice about registering for VAT once your turnover/sales (not profit!) exceeds £85,000 per year. Below that figure, you can choose whether to register for VAT or not.
If you’re just starting out in business but have plans to grow beyond £85,000 per year of sales then in most cases it is sensible and smart to register for VAT when you start out.
We see so many businesses that have to go through so much hassle and grief in their second or third year when they have to add 20% VAT to their prices and life would have been so much easier for them if they had been charging VAT from the beginning.
On the other hand, if your ambition for your business is unlikely to take you beyond £85,000 of turnover then it’s normally best to not register for VAT.
As a sole trader, your profit is like your salary so you get the same tax allowances as an employed person but you then have to pay income tax on your profits above that level.
As a limited company, you’ll pay corporation tax on the profits that the company makes and you’ll also pay personal tax on your dividends.
Then there’s VAT, which you’ll have to charge once your annual sales go above the threshold – which is currently £85,000
And you’ll be liable for payroll taxes and National Insurance if you employ people.
Well, technically, you don’t have to have an accountant.
But there are two main reasons why 99.9% of businesses choose to have an accountant:
a) There is a multitude of tax and legal requirements that you have to comply with when you’re running any kind of business and your accountant will keep you legal and above board on all of them.
Trying to do everything yourself is not normally sensible because of the time it will take you and the knowledge and expertise needed to do all of these things properly;
b) A good accountant will save you tax and help you to grow your profits. He/she will help you to organise things in the right way and also provide advice that will ensure you are better off with an accountant than without.
The right accountant can do so much more for businesses than most business owners realize so choosing the right accountant really does matter. My advice is to use the following criteria when making your decision:
– look for someone you like and get along with;
– someone who can add real value to your business;
– someone who takes the time to understand you and your requirements and doesn’t just talk about themselves and all the things they do;
– fees are obviously important as well. Choosing the cheapest accountant is rarely the right thing to do because you really will get what you pay for and the right accountant should end up putting more money in your pocket through the tax savings and profit growth than the amount you pay them.
Because it’s a good way of utilising your personal tax-free allowance. So you get paid a salary and don’t pay any personal tax on it, and the company also saves the corporation tax on that.
For most businesses putting yourself on the payroll saves you in the region of £1,500 per year in tax.
A shareholder is someone who holds shares in the company. Effectively they are an investor in the business.
Shareholders and Directors are completely different, although with many smaller businesses often they’re the same person, they don’t have to be.
You can have a Director that’s not a shareholder and a shareholder that’s not a Director.
Shareholders do not have the same legal obligations as Directors.
A Director is somebody that runs a limited company.
Directors have legal obligations around the way that they run a limited company.
Every limited company must have at least one Director. For small businesses, that Director is often an employee and a shareholder as well.
Usually, yes – providing you talk with them before the tax bill is due for payment.
They don’t want to be ‘funding’ your business or ‘lending you’ money though but in our experience they will normally arrange a time to pay, providing you can show them that you’ve tried to borrow money from the banks, family, friends etc. first.
You just record all the mileage you do ‘on business’. It’s always best to do it monthly, You can claim 45 per mile for the first 10,000 business miles each year and 25p per mile above that.
You can claim for most things that are ‘wholly and exclusively’ used for your business.
That means that you can claim mileage, travel costs, subsistence, the use of your home as an office etc.
It’s normally best to put all your business spending through your company account or on a company credit card then nothing gets missed.
That normally depends on a couple of factors:
– One is the legal aspect. Do you want the company to be a separate legal entity to you? In many cases, the answer is ‘yes’.
–The other factor is a financial one. Normally if your profit is going to be above about £35,000 per year then you’ll be better off overall as a limited company.
HMRC has got a lot savvier at collecting money in recent years. They used to be quite happy to wait until 10 months after year end, and then get paid. But now they’ve realized they can do a lot more with tax codes and collect more money as a sort of ‘pay–as–you–go’.
That’s why a lot of business owners have seen changes to their tax codes.
Normally, yes.
We recommend that you pay yourself a salary of between £8,000 and £11,500 per year to use all your personal tax-free allowance.
Above that, for most people, it’s normally worth taking additional ‘drawings’ by way of dividend, although the tax savings are not as large now as they were a few years ago.
Your personal tax is due normally twice a year at the end of January, end of July.
You might pay some personal tax through your payroll.
Company tax is always due nine months and a day after your company’s financial year-end.
It’s impossible to give a precise answer to that question without seeing all your information and understanding everything about your business
But there are three things I can promise:
a) You won’t pay a penny more tax with us than you would with any other accountant – and in most cases, we find savings that other firms have missed
b) We do everything within the law – so you’ll have complete peace of mind.
c) The question you should really be asking is ‘how can you help me make and keep more money?’ We find that’s a much more useful approach that makes you considerably wealthier over time.
In most cases, the answer is no.
Cars used to be a huge benefit and perk – years ago people were actually encouraged to drive more miles to pay less tax – but now, unless it’s an electric or a hybrid car, it’s generally not worth having a ‘company car’.
We can do the calculation for you, based on the value of the car, CO2 emissions, etc but in the majority of cases, you’re better off buying a car personally, and claiming mileage through the business.
If you’re getting an electric car or a hybrid then the situation can be different and it can sometimes be worthwhile to buy/lease it through the business.
The only way to get the best advice is to speak with us about your specific situation.
That depends.
We’ve got a menu of services and, in simple terms, the more you pay, the more we do for you and the better service you get.
Most of our clients prefer to pay an all-inclusive fixed monthly fee that includes all the work, meetings, phone calls, etc so they know exactly where they stand and there’s never any surprise bills.
Our principle though, whatever level of service you choose, is that we’ll work super hard to save – or make you – more money than you pay us each year and so our services effectively don’t cost you anything. You’ll be amazed at some of the ways we’re able to help businesses once we sit down and understand them properly.