‘Astute’ tips on covid tax exemptions for businesses

Employment-related coronavirus tax reliefs

Since March last year, many interim tax exemptions were brought in to prevent “benefit-in-kind” issues arising from coronavirus-related costs incurred by employers. Here at Astute Recruitment Ltd, we felt it was important to highlight these, especially for SME businesses and employers in general who may not have a resident tax expert on-hand.

Helen Thornley, technology officer at ATT, compiled a really useful article in Accountancy Age, highlighting some of the main points to help employers, employees, and flags the measures with a limited shelf-life. We have summed up the key points with useful links below.

COVID-19 tests provided by Employers

HMRC’s position on this has waivered. Originally HMRC advised that tests provided by employers outside the national testing programme were a taxable benefit in kind for the employee because said tests were not “wholly, exclusively and necessarily’ for the purpose of the employee’s duties.

Following widespread criticism, including the Treasury Committee saying this was an unhelpful stance, the Chancellor readily agreed to do a ‘180’ on this.

As expected – to transfer the alterations into formal legislation has taken time, so tax policy papers in November and December 2020 confirmed that there will be ‘no tax consequences for employer-provided testing for ‘active’ cases in the 2020/21 tax year. This specifically refers to antigen tests that identify current COVID-19 cases.

An important caveat is that this exemption DOES NOT extend to employer-providing antibody testing as antibody testing tests whether an employee has had the virus previously. Normal benefit-in-kind rules continue to apply to them.

Every policy paper has its own new statutory tool with its specific relevance to these changes.

The first statutory instrument provides that ‘income tax’ is not chargeable on employer-provided tests for ‘active’ cases of coronavirus from December 8, 2020 to April 5, 2021. The accompanying policy paper confirms that HMRC will exercise their discretion under their collection and management powers and not collect either income tax or national insurance contributions (NICs) on tests carried out earlier in the 2020/ 21 tax year.

The second related statutory instrument (due in January) exempts from NICs any employer who opts to either reimburse or provide funds in advance for an employee’s coronavirus test. This will apply from 25 January to April 5, 2021, but again the policy paper confirms that HMRC will use their statutory discretion to refrain from collecting both NICs and Income tax for employer-reimbursed tests for the earlier part of 2020/21. The corresponding income tax exemption is due to be included in the next Finance Bill.

IMPORTANT: Employers should be aware that, as HMRC’s view of the underlying position has not changed, unless further exemptions are granted, when these antigen-test exemptions expire on April 5, 2021, the costs will revert to being a taxable benefit in kind. Since employers could well still be paying for tests beyond that date, the ATT is raising concerns with HMRC and asking for these antigen-test measures to be extended.

Office equipment

At the start of the pandemic when mass homeworking was first advocated, many employees will have found themselves in need of extra equipment – from laptops to monitors, keyboards and printers and even office furniture. In general, provided there is no significant private use, employers can provide these items without tax consequences.

BUT, where employers allowed employees to purchase the required items themselves and then agreed to reimburse those costs at a later date, such reimbursement is taxable under the usual rules. Thankfully a temporary exemption from these rules will apply to reimbursements made between 16 March and April 5, 2021 inclusive. During this period of time, provided that the equipment was purchased for the sole purpose to enable homeworking/ WFH to take place as a result of coronavirus – and it would have been tax exempt if the employer had provided it directly – employers will be able to reimburse their employees for purchases of office equipment without tax or NIC consequences.

Being and ‘Cycle to work’

Under the ‘cycle to work scheme’ an employee can hire a bike, AND necessary safety equipment, from their employer and pay for that hire out of their pre-tax earnings. The scheme effectively allows employees to obtain a bike in a tax-efficient manner, provided that the employee uses the bike at least 50 percent of the time for qualifying journeys, which generally means commuting to and from work.

Employees who have benefited from these schemes but are now working from home may well struggle to meet this condition. HMRC guidance has now been updated to confirm that anyone who joined an employer-provided cycle scheme before 20 December 2020 will not have to meet the 50 percent qualifying journeys requirement. This easement will apply until April 5, 2022.

The easement will not apply to employees who joined a scheme on or after December 21, 2020 as they will have been expected to factor in the impact of the pandemic on their use of the bike.

‘Online parties and work socials’

On November 20, HMRC acknowledged that a virtual party would fall within the current exemptions for an annual function. This meant that employers wanting to provide some sort of festive fun wouldn’t land their employees with a tax bill provided that they followed the usual rules requiring the event being annual (i.e. not a one-off celebration), open to all staff and that the total cost of the event (including VAT, food, drink or party favours in a ‘party box’) was no more than £150/head.

While Christmas is past, the pandemic is still very much with us, so employers with other annual events coming up might be pleased to learn that the relaxation was not just in respect of Christmas parties, but any such annual function – provided that the total cost per head of the events combined is less than £150 in any given tax year. This means that provided all the other conditions are met, an employer can move comparable regular events online and still benefit from the usual rules for annual functions.

While all these exemptions are helpful, most of them are time-limited and employers who miss the relevant ‘windows’, could still create a benefit-in-kind charge for themselves and their employees.

This article by Mary Maguire, MD Astute Recruitment, was based on an original article by Helen Thornley, an ATT technical officer, which appeared in Accountancy Age on 7.1.2021. For the original article, click HERE.

Temporary Workers & Covid-19. We answer your FAQs

Coronavirus (COVID-19)

We have put together the most frequently asked questions by temporary workers to help you keep safe, healthy and take the best precautions in the current lockdown.

Q: What protective measures can I take to prevent possible contraction of COVID-19?

Follow the guidelines outlined on the UK Government’s website HERE.

In summary, the advice is to do the following.
· Avoid close contact with people who are sick.

· Avoid touching your eyes, nose and mouth.

· Stay home when you are sick.

· Cover your cough or sneeze by either sneezing into your elbow or with a tissue, then immediately throw the tissue securely away in a covered bin.

· Clean and disinfect frequently touched objects and surfaces using a regular household cleaning spray or wipe.

· Wash your hands often with soap and water for at least 20 seconds, especially after going to the bathroom; before eating; and after blowing your nose, coughing, or sneezing. It does not matter if the water is hot or cold. The most important thing is to ensure you wash your hands for at least 20 seconds thoroughly. About the length of time it takes to hum ‘Happy Birthday’ twice.

· If soap and water are not readily available, use an alcohol-based hand sanitiser with at least 60% alcohol. Always wash hands with soap and water if hands are visibly dirty. For further guidance on handwashing: https://www.cdc.gov/handwashing/

· It is also a good idea to avoid close contact with people in a business setting, e.g., shaking hands. You may inform the individual that while you respect business protocol, you think it is a good idea to avoid handshaking while this outbreak is happening.

What should you do if you are currently a temporary worker for Astute Recruitment Ltd, on a temporary assignment and the following happens? Your FAQs answered.

Q: What if I test positive for Coronavirus (COVID-19)?

Do not report to work if you are on an assignment or project. Call your consultant at Astute Recruitment Ltd as soon as you practically can and let us know you have tested positive for COVID-19, and we will give you further guidance.

Your Recruitment Consultant will contact the client straightaway for you.

Q: What if I may have been exposed at my worksite to someone who tested positive for COVID-19?

Please contact the Astute Recruitment office immediately and tell your Recruitment Consultant that you believe you have been exposed at your work to someone who tested positive for COVID-19. You’ll be given further guidance. If your normal recruitment consultant is not available – please contact Mary Maguire on 07717 412 911 who will deal with this immediately for you.

Q: What if I feel sick? What should I do?

Your health and wellbeing are of the utmost importance. Contact our Astute Recruitment Head Office or your Astute Recruitment Consultant if you are sick.

Importantly;

DO NOT REPORT TO WORK
IF AT WORK, GO HOME IMMEDIATELY.
SEEK MEDICAL ADVICE AS SOON AS POSSIBLE (Call 911)

If you are diagnosed with COVID-19, please follow all medical advice and stay home until you have recovered and have been medically cleared to return to work. Your Recruitment Consultant at Astute Recruitment will inform the client about your availability and when you are able to return to work. For the Government’s latest advice and information, click HERE.

Q: What if the client’s worksite where I work closes?

Contact our team at Astute Recruitment straight away to let them know the client has decided to close their office(s) for a ‘period of time’.

Your Recruitment Consultant at Astute Recruitment will work with the client directly to determine if your work can be done remotely and if you can do so. If remote working is not possible, your assignment or project could come to an end. This is likely to be at the client’s discretion. If your temporary assignment should be ended, our team at Astute Recruitment will do our very best to secure another opportunity for you to continue working.

Q: Will I get paid if I am home ‘sick?’

You could be entitled to statutory sick pay. Please contact our office at Astute Recruitment or your consultant direct, who will then communicate with the client directly and provide you with more information.

Q: What if I am asked to travel internationally for my assignment?

Travel is suspended to all countries noted on World Health Organization and UK Government restricted lists, which are based on the very latest government advice and alerts. This is a changing situation and countries with travel notices change often. Astute Recruitment Ltd is monitoring these notices and you are encouraged to check these too.

If you are comfortable travelling, follow the travel guidelines on the Government website. If you are not comfortable travelling, you are not required to go. Contact your Astute Recruitment Office or your consultant, and let them know that you have been requested to travel and you do not feel comfortable doing so. We will work with the client regarding your concern(s).

Q: What if the client asks me to travel domestically for my assignment?

If a business trip requires you to travel well beyond your regular daily commute, requires air-travel, an overnight stay or extended travel, and you are not comfortable doing so, please contact us. Inform your Astute Recruitment office or your consultant at Astute. Inform us that you have been asked to travel and you do not feel comfortable doing so. We will work with the client regarding your concerns.

Q: What if my child’s nursery/ school is closed due to potential Coronavirus exposure or I am unable to leave my home to go to my assignment as I have no-one to look after my child?

Currently here in the UK, the Government has instructed that only children of critical workers may be allowed to go to school/ nursery. If you are not a critical worker, your child or ward will be required to be looked after by you at home. You can see the Government’s full guidance HERE.

Explore if you have alternate childcare options. For instance, a partner, or relative, as part of your household, who could look after your child/ children while you are at work. If no one is available, contact Astute Recruitment or your consultant at Astute Recruitment, and they will work with the client to find out if any of the work can be done remotely. If not, your assignment could be ended. This will often be at the client’s discretion. Again, your consultant and the team at Astute will work with you to find another temporary assignment, based on your availability.

Q: What if I have taken a personal trip or vacation and travelled to or from another country, should I tell Astute or the client myself?

Currently, the instruction from the UK Government is that all non-essential foreign travel is forbidden.

If due to an emergency, you travelled to a country without WHO (World Health Organisation) travel restrictions, and you are not experiencing any illness or symptoms, you are not required to communicate information about your travel.

If you’ve recently visited a country or area under travel restriction from the World Health Organisation or UK Government contact Astute Recruitment or your consultant at Astute for further guidance before returning to work.

Think of St George and you’re probably picturing a heroic knight, slaying a ferocious, fire-breathing dragon! As the country’s patron saint, today, the 23rd April 2020 St George’s story is as iconic as his white and red flag.

However, like many early saints, the exact details of his life remain a mystery. Here, we separate the facts from the fiction, establishing the truth behind the legend of St George.

1. ST GEORGE WASN’T ENGLISH!

St George might be hailed as a national hero, but he was actually born – in the 3rd century AD – more than 2,000 miles away from England in Cappadocia (modern-day Turkey).

He is thought to have died in Lydda (modern-day Israel) in the Roman province of Palestine in AD 303. It is believed that his tomb was in a place called ‘Lod’, a centre of Christian pilgrimage.

2. ST GEORGE WASN’T A KNIGHT!

Often portrayed as a knight in shining armour, the truth is less fanciful.

Whilst St George was depicted from the 11th century as a heroic knight or a warrior on horseback, it is more likely that he was a humble officer in the Roman army.

3. ST GEORGE WAS A MARTYR

Like many saints, St George was described as a martyr after he died for his Christian faith. It is believed that during the persecutions of the Emperor Diocletian in the early 4th century, St George was punished by execution, for refusing to make a sacrifice in honour of the pagan gods at that time.

4. HE NEVER VISITED ENGLAND!

Yep, St George never actually visited England. However his reputation for virtue and holiness spread across Europe and his feast day – the 23rd April – was celebrated in England from the 9th century onwards.

He became popular with English kings. Edward I (1272-1307) had banners bearing the emblem of St George (a red cross on a white background) and Edward III (1327-77) had a strong interest in the saint and owned a ‘phial’ or ‘relic’ of his blood. It was not until the reign of Henry VIII, that the cross of St George was used to represent England.

5. THE DRAGON WAS ADDED LATER

The story goes that St George rode into Silene (Libya) to free the city from a dragon who had a taste for humans, but it’s a story that post-dates the real George by several centuries!

Images of George and the dragon survive from the 9th century – 500 years after his death. Originally these may simply have been symbolising the battle between Good and Evil. In the Middle Ages, the story was developed and popularised in a compendium of stories about saints’ lives called ‘The Golden Legend’.

6. ST GEORGE WAS A SAINT FOR 1000 YEARS BEFORE THE ‘HOLIDAY’

St George was canonised in AD 494 by Pope Gelasius, who claimed he was one of those ‘whose names are justly revered among men but whose acts are known only to God’.

A feast day of St George has been celebrated in England for hundreds of years on 23 April, which was possibly the date of his martyrdom. Following the Battle of Agincourt in 1415, St George’s Day became one of the most important feast days in the English calendar.

7. ENGLAND ISN’T THE ONLY COUNTRY TO CELEBRATE ST GEORGE

St George is truly an international saint and England is not the only country or region to claim him as its patron. Something that in todays multi-cultural England, ought to be celebrated!

England shares St George with Venice, Genoa, Portugal, Ethiopia and Catalonia among others as their patron saint and many of these places have their own celebrations and ceremonies in his honour.

8. PEOPLE TURNED TO ST GEORGE FOR PROTECTION

During the Middle Ages, people believed that St George was one of the ‘Fourteen Holy Helpers’ – a group of saints who could help during epidemic diseases. St George’s protection was invoked against several nasty diseases, many fatal and with infectious causes, including the Plague and leprosy. It is a shame we cannot invoke his name to defeat the Coronavirus!

From around 1100, St George’s help was also sought to protect the English army. In William Shakespeare’s Henry V, the monarch calls on the saint during his battle cry at the Battle of Harfleur in the famous, “Once more unto the breach, dear friends” speech, crying “God for Harry! England, and St. George!”

Five hundred years later – during the First World War – a ghostly apparition of St George is said to have aided British troops during their retreat from Mons, and the naval commander of the Zeebrugge Raid, cited the saint as inspiration!

9. ST GEORGE REPRESENTS THOSE WE HONOUR

The Order of the Garter (founded by Edward III in 1348) is the very highest order of chivalry in the country, with Queen Elizabeth II at the helm as ‘Sovereign of the Garter’.

To this day, St George’s cross still appears on the Garter badge and his image is the pendant of the Garter chain.

In 1940 King George VI created a new award for acts of the greatest heroism, bravery or courage in the face of extreme danger. The George Cross, named after the king, bears the image of St George vanquishing the dragon. The image of St George also adorns many of the memorials built to honour those killed during World War One.

Poignantly, perhaps in 2020, we should use this legendary award for bravery to honour the frontline workers and NHS staff working so valiantly to help those affected by the Coronavirus and COVID-19.

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