‘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.

Astute tips on the Extended Furlough scheme

So, as we find ourselves in another Lockdown, what is the advice for employers and their employees on this adaptation of the Government’s original Furlough Scheme? Here, we try and break these down and provide some useful links for more detailed advice and webinars.

HMRC have published full revised guidance about the extended Coronavirus Job Retentions Scheme – i.e. the Furlough Scheme. This has now been extended to March 31st 2021.

The key changes for furlough claim periods from November and beyond are as follows: –

The UK Government are currently reviewing if employers could be eligible to claim for their employees serving contractual or statutory notice periods and will change the approach for claim periods starting on or after December 1st. Further guidance is to be published at the end of November. As things stand, employers may claim the grant for notice periods.

In the cases of Employers claiming for an employee for the period from November 1st retrospectively, only backdated written agreements put in place up to and including November 13th may be relied upon for the purposes of a claim. In simple terms, this means employers should ensure written furlough agreements are in place by November 13th if they are wanting to claim the grant retrospectively from November 1st.

After December 2020, the names of employers who claim under the Furlough Scheme for the month of December onwards and, for employers that are registered Companies or Limited Liability Partnerships, both the company name and registration number will be published by HMRC, so that this information will be in the public domain.

Should an employee decide to end their maternity leave early to enable them to be furloughed, they must give their employer at least eight weeks’ notice of their return to work and the employer will not be able to furlough them until the end of the eight weeks.

USEFUL LINKS: –

Top Accountancy firm, Dains, have compiled a number of useful HMRC advice and areas for businesses to focus on including: –

· Time to Pay – HMRC

· Raising finance

· COVID-19 Business Interruption Loan Scheme

· COVID-19 Bounce Back Loan Scheme

· COVID-19 Job Retention Scheme – A Practical Guide (Check out our Top Tips)

· COVID-19 Job Retention Bonus

· COVID-19 The Self Employment Income Support Scheme

· Financial forecasting

· Grant applications, loans and funding

· Cash management and profit improvement

Have a look at Deloitte’s upcoming webinars on COVID-19: –

3 December 2020
The COVID-19 webinar: health, economics, business

The COVID-19 webinar: health, economics, and business

17 December 2020
The COVID-19 webinar: health, economics, business#
For the latest Government advice and support: –

Click on this link for help and support if your business is affected by COVID-19 from the Government’s website

To keep up to date with the latest developments on COVID-19, advice to employers, businesses, and employees, please follow our company page on LinkedIn HERE.

You can also follow us on FaceBook HERE

On Twitter by following astute_recruit

& Instagram HERE

The social media and pressures in general forced upon someone who was actually very fragile, resulted in tragedy for Caroline, her friends, and family.

Her death also served to highlight as a warning for all of us that whilst dates in the year like Valentines Day have typically become a day of ‘lurve’, joy and celebration, there are a whole lot of people for whom these dates float around bringing them dread.

Relationships can and do break up.

Many people, find occasions like the 14th of February hard to deal with as they are single, having relationship difficulties or just ‘in-between’ relationships.

Some will be very happy in their own company too.

Mary writes in her piece that

“Whilst happily married, I’ve known times before I met ‘the one’ where I delighted in my own company, and times I felt genuinely lonely, feeling a bit out of the loop if Valentines Day coincided with one of those periods.

My point? It’s easy to feel that you should comply with the herd. In this case, the schmaltz churned out by any kind of media or peer pressure.

So, whatever your relationship status, celebrate the fact that you, yourself, are great! Allow yourself to feel happy whether you are single, married, or other. Most of all, be mindful that today and every day, there may be work colleagues, friends and family who may be finding it tough and who would appreciate some love of the friendship and empathy kind.“

This is such a huge topic and one that employers everywhere and anyone with work colleagues need to be mindful of. Not everyone may be in the ‘happy’ place you are in, but a friendly smile, gentle touch and warm words of encouragement can go a long way in helping someone step away from dark thoughts.

To see other posts and articles by Mary, you can view her LinkedIn and Follow Mary on https://www.linkedin.com/in/mary-maguire-55307318/

You can follow our company LinkedIn page by clicking HERE and just selecting “FOLLOW”

How to inspire potential new hires to work for your team

Employee Benefits & Initiatives – ‘Creating Desire in your Hires and existing team’

We asked several HR Managers, CFO’s and Financial Directors, if they would be interested in us providing guidance and advice around employee benefits and staff initiatives.

The aim?

To improve candidate attraction throughout the hiring process and also to appeal to existing valued staff.

We thought we would share this information as the feedback has been so positive…..

We now have a deeply competitive job market – not just in Derbyshire but across the East Midlands and beyond.

Employee benefits and initiatives have become increasingly important to employers looking to attract top local talented professionals and for employees as part of their decision making process when choosing whether to accept a job or not. Increasingly people looking for a new job are not just thinking of the basic salary but the overall package a future employer can offer that fit in with their own life, family and commitments. Employee Benefits have also become a key issue in terms of improving staff retention for employers.

This is particularly important when employers are either seeking to retain specific, valued, sector trained staff across disciplines including accountancy, marketing, engineering etc. and to attract those with key talents into their business and not into the arms of one of their competitors!

The important key trends in benefit provision for employees are now focussed on: –

Flexible working
Pensions
Holiday entitlement
Flexible Benefits Package
Staff Discounts
Childcare Vouchers
Wellness at work – including employer’s attitudes to mental health and environmental factors
Staff incentives/ initiatives

Flexible working – If companies can offer core hours of working with the employee able to gear the extra hours to make up the full working week either before the core hours or after are particularly popular. For instance, staff being able to work 7-4, 8-5, 9-6.

Pensions – While changes to UK Pension policy for businesses and business owners through auto-enrolment have been established, many companies just offer the standard minimum allowances. If a business can offer a tiered scheme according to seniority of position and longevity of service to their staff this is a real consideration in the employee market place for staff looking for a new role and for those deciding whether to stay with their existing employer.

Holiday Entitlement – The norm is now 25 days plus Annual Statutory Bank Holidays with an increasing amount of companies offering up to 30 days tiered according to longevity of service of staff and seniority of position.

Flexible Benefits Package – Whereby an employee is given a ‘benefit pot’ worth a certain amount of money whereby additional holidays can be purchased at the expense of one of the other benefits to suit that person’s individual circumstances.

Staff Discounts – Whereby the business is able to offer discounts on their own products or services to staff (e.g. several major East Midlands retailers offer significant staff discounts off the standard retail price of their products!). Alternatively companies can use the services of businesses specifically able to provide employee discounts from leisure/ retail outlets.

Childcare vouchers – For any employees with families this is a really big consideration and if employers are able to offer this – particularly to staff with very young children this is a major consideration for staff looking for work and also those currently employed.

Wellness at work – If companies/ employers are able to demonstrate their ability to recognise, reward and genuinely value their hardworking staff through awards, personal development plans, financial support with professional training costs – all of these count enormously. Along-side these are demonstration of softer benefits such as provision of a clean, friendly and safe environment for staff to work. Many businesses include staff areas where staff can have their lunch, rest and relax. Some businesses have games facilities for instance. Mental health at work for employees is also increasingly important. Have a policy on how to support your staff if they should have any mental health worries or concerns and promote this! Sometimes it is just having an empathetic but responsible ear in the business environment who staff know they can turn to confidentially which can make all the difference.

A working example of the staff benefits currently offered to a major overseas Parent company with wholly owned UK Subsidiaries / SME hubs in the East Midlands is included below: –

25 days’ holiday plus statutory bank holidays
Subsidised canteen
Standard 35 hour working week* Extra hours need to be worked during busy periods
Flexible working (depending grade of role and the department – i.e. certain staff have to provide office cover between 8.30- 9. 30. For management graded roles – (i.e. usually for fully qualified accountants) – there would normally be flexible working with the core hours between 10am-4pm. In certain finance departments most staff work 9-5 but they would still have to have the cover in the department for the 30 minutes each side of that on a rota basis.
Company Pension Scheme (employer contributions tiered from 5% to 7% depending on the seniority of the employee) – staff can match these contributions up to 1% below the employer’s contributions. Defined benefit schemes are popular in this regard but increasingly rare. If your business can offer a pension scheme above the statutory minimum you will really stand out.
Company bonus scheme (awarded according to the company’s performance and the employee’s achievement of KPIs). For more senior staff, bonus is a higher percentage (say 10% of salary) with their personal KPI’s / performance making up to 50% of the overall bonus awarded as they are likely to contribute more to the business’ profitability on a per capita basis.
Staff discounts on own brands (where applicable) or offering other retailer discounts/ gym membership etc.
Car Allowances – for Financial Controller/ Finance Director and management positions in general – car allowances are increasingly favoured by potential employees as part of the overall benefits package – particularly as they would receive any car allowance on a monthly basis in addition to their salary. Typically car allowance schemes are between £5,000 – £8,000 per annum with Executive / Director positions usually offering £10,000 – £12,000 per annum.
Ability to purchase extra benefits: Some employers will have a scheme in place whereby staff are able to purchase additional holidays up to one week’s worth. Alternatively on a salary sacrifice basis they would be able to purchase additional pension or other benefits to suit their specific needs.
Free Car parking
For finance staff, the 6-week period after year-end can mean accounts staff are expected to work significant extra hours to help while the post year-end audit work is completed and statutory filings / shareholder information is processed and published. After that period, it is acknowledged that if there are any significant extra hours required, then time off in lieu can be issued at the line managers discretion.

For many SME businesses, not all or even most of the core key benefits will be practical. If an employer can incorporate just some of these to their existing benefits package, it is proven to be a valuable consideration to existing staff assessing their future with their employer and for employers looking to attract the best local talent available.

Alternatively – what initiatives can your SME business offer to staff that won’t impact on the day to day but increase productivity, performance and profits?

Some initiatives needn’t cost a lot of money AND can be tailored to your own SME business where some of the above more ‘corporate’ benefits would not be possible.

The key is demonstrating and promoting to your team and to new potential staff, that they matter and harnessing that team spirit.

At Astute we have our Reward Board – envelopes with numbers pinned to a board! The numbers correspond to certain tasks individuals need to achieve – be it a testimonial, client visit or placement. Once one of the team has achieved the ‘task’ they choose one of the numbered envelopes and write their name on that envelope. Once all the envelopes are ‘claimed’ we have an opening ceremony. The team are allocated their envelopes and open them. Prizes include starting later, retail discounts, early finish on a Friday and more!

We are also very careful to ensure that the ‘tasks’ are for everyone so our brilliant admin team can also take part and have their own ‘goals’ to achieve. If you are going to have a team scheme like the Reward Board – you need to ensure that EVERYONE is included and can take part!

So, inspire desire in YOUR business for potential hires and existing staff by thinking about how you can add value to your benefits scheme and team initiatives.

Your future and existing staff will thank you!

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Mike

16:04 13 Mar 23

Highly recommended! Josh and Sarah have been fantastic at Astute. They've found and placed me in 2 jobs now between them, both really responsive and excellent at keeping you up to speed with things. Very knowledgable about the roles and happy to talk to companies with any queries you have.

C R.

10:45 27 Jan 23

Great agency one of the best ones I've worked with! Liz has been a great help and support in helping me towards a new direction in my career life. She is very attentive and keeps me in the loop at all times! She makes the extra effort to work with my preferred requirements for work and even if it isn't completely attainable she meets me in the middle and does as much as she can to help! Also Liz is very funny might I add 😂 and I'm happy that I can now put a face to the name after all these years! Thank you again Liz for all your help and support! 😊

Christine

10:32 20 Dec 22

Josh and the Astute team was very swift to help me to find roles that matched my profile. They are really reliable and will help through every step of the recruitment process going out of their way to assist and follow up when needed. Could not find a better recruitment agency!

Helen Pinegar

16:19 18 Dec 22

Fantastic recruitment agency.. Josh was extremely enthusiastic, encouraging and clearly knowledgeable about what was needed from both the employee and the employers point of view. Extremely supportive especially in regards to interview preparation and endeavoured to procure feedback promptly. Wouldn’t hesitate to recommend Astute in the future to both candidates and recruiting businesses particularly for the right fit for the role!!!

Lisa Leigh

11:56 30 Nov 22

I have worked as a candidate for Astute and they have been excellent. Super friendly service and professional agents keen to fit the right person to the right job. It has been a pleasure dealing with them and I would happily work for them again in the future. Highly recommend this agency.

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