The Positive Accountant - Vol 2 Ed 45
Updated: Aug 5
I'm in trouble again...
I just wandered down the other end of the house to see the person that some clients call The Payroll Princess. And mentioned that the Chancellor had changed the Job Support Scheme rules.
I won't repeat the language (it wasn't very Princess-like), and can't replicate the stare (we now have a stone spider in the corner of the room). I think Debbie's not very happy....
I think I understand why. Seven months ago we thought that a furlough was an eighth of a mile, since then we've furlough scheme one, furlough scheme two (part time working), changes to furlough calculations as to what got reimbursed, then progressively scaling back each month from 80% to 70% and now for this month only 60%.
Each time of change the payroll software has been a day or two too late to be of much help. Which means custom-built spreadsheets each time !
Then we have the all new Job Support Scheme (this is, sorry was, the 'Thirds' scheme - employee must work and be paid at least a third of their normal hours, of the shortfall the employer pays a third, HMRC pay a third and the employee suffers the remaining third). Due to start 1st November, we've been talking to clients about it in the run up to then and Debbie had already been designing spreadsheets to make it happen.
And it is this all new Job Support Scheme that has been changed, the rules of engagement are different before the first shot has been fired !
So forget the thirds, the scheme (technically 'JSS Open') now works as follows:-
- The employee must work at least 20% of their normal hours and be paid for those
- HMRC will pay 61.67% of the shortfall compared to usual pay (up to a maximum of £1,541.75 per month)
- The employer will pay 5% of the shortfall compared to usual pay (up to a maximum of £125 per month)
First claims can be made from 8th December for pay periods ending and paid by end of November. Perhaps Debbie will have calmed down by then...
There is also the JSS Closed scheme which covers businesses where their premises are legally required to close, including premises with restricted compared to normal activities (eg restaurants now delivery/takeaway only or restricted to providing food and drink outdoors only). These get two thirds of the wages not paid (up to £2,083.33 per month) paid by HMRC, with no requirement for the employer to contribute anything.
Just a warning in case any reader were tempted to be creative with their interpretation of the rules - any employee who has been the beneficiary of one or more of the support schemes will be made aware of that within their online Personal Tax Account. And if they believe their employer has used the scheme incorrectly, be encouraged to report said employer. I don't believe that will affect anyone reading this, but just in case this crops ups in discussions at the bar of a pub (remember those ?)
Personally, I would have thought all of the above were Positive developments. But as I live with the Payroll Princess and would like to have an harmonious weekend, I couldn't possibly comment....
So, what are the other Positives of today ?
1. SEISS Grants extended
Many self employed people have benefitted from rounds 1 and 2 of the SEISS. Third and fourth rounds were announced in principle a little while back. The third round - to cover November to January - was trawled as being 20% of average three monthly profits. It's now been doubled to 40%, great news for those that qualify.
I won't go into the detailed qualification criteria which - so far as the maths is concerned - mirrors rounds 1 and 2. But to get round 3 you also need to 'tick the box' that either your trade has ceased because of COVID-19, or you are continuing to trade but seeing reduced demand due to COVID-19. Full details and how to make claims (which I expect will be based on the same mechanism as rounds 1 and 2) will be available mid November.
2. Job Retention Bonus Details are available
So, you had a member of staff furloughed. You brought them back. You have continuously employed them from that point until 31st January 2021 (even if supported by the JSS Open or JSS Closed schemes), and have not served any notice of termination before 31st January 2021. You have paid them the minimum income threshold (broadly at least £520 per month for three months from 6th November)
Then you will, at the end of January be entitled to £1,000 per employee.
Now, in answer to a burning question, I can't see any restriction in the regulations available so far as to whether you are entitled to this for furloughed directors. So based on what I know at the moment I provisionally conclude that self-furloughed directors are also eligible, provided they meet the other criteria including the £520 per month threshold.
More information is at
https://www.gov.uk/guidance/check-if-you-can-claim-the-job-retention-bonus-from-15-february-2021#mit
3. Working from home Tax Relief looks pretty generous
I've mentioned previously the increase in an expenses claim that employees can make when their employer requires them to work from home - it's £6 per week now.
To make the claim, those that complete (or have me complete) a self assessment tax return will make the claim on that return - so from April next year.
Those not within the self assessment system can make then claim through the following link
https://www.gov.uk/tax-relief-for-employees/working-at-home
Now, the really interesting news. According to Martin Lewis the claim can be made for a full year even if only required to work for a day. The Chartered Institute of Taxation don't recognise Martin Lewis' website as a scholarly research material, and it clearly doesn't have the benefit of tax law. But the text can be found at
Too good to be true ? Let's do the maths - £6 per week, 52 weeks, for a 40% taxpayer = £125 tax saving.
Worth having, that's a bottle of wine paid for !
But probably not worth HMRC's while checking every claim, so you can see some pragmatism coming in.
And it's the weekend - have a good one !
Stay safe, stay positive.
Adrian