ACQ5 Awards – An Honour Granted to Select Organisations & Professionals

ACQ5 Awards – An Honour Granted to Select Organisations & Professionals

The ACQ5 annual awards program recognizes organizations that have achieved beyond exceptional commercial success in their designated area of expertise. Since 2005, the ACQ has acknowledged organizations worldwide, celebrating their achievements, milestones and innovations through their annual award programs.

The award is only presented to professional sector organizations that have demonstrated quality and excellence in their respective fields, as well as those that have consistently made generous contributions to their local economic growth in the last 5 years.

Each year, ACQ5 seeks the help of world-renowned industry leaders, exemplary teams, influential professionals and esteemed organizations – all of which represent the pinnacle of best practices and achievements in their respective disciplines.

Guided by the results of the polls, individuals and organizations that have had the most influence and impact within their industry over the last 5 years are duly honored. And, before handpicking winners, ACQ5 studies the nominations made by voters very closely and acknowledges that all the organizations or individuals that were nominated are leading forces in their sectors.

At Not Just Bookkeeping, we happen to be among the few organizations recognized for their performance and quality services – an honor and privilege that we are proud to have. Earlier this year, we won the Best Practice Operator of the Year (Accounting Services) award at the ACQ5 Country Awards 2020.

Moreover, we’d also like to give a special thanks to all our supporters and particularly to our respective ACQ5 Members!

Statutory redundancy pay and furloughed employees

Statutory redundancy pay and furloughed employees

As the Coronavirus Job Retention Scheme draws to a close, employers may face the difficult decision to make some employees redundant. Legislation was introduced at the end of July to protect furloughed employees.

Entitlement

An employee is entitled to statutory redundancy pay if they have at least two years’ continuous employment when they are made redundant. Where an employee has been furloughed during the Coronavirus pandemic, the time that they are on furlough counts as part of their continuous employment.

Amount

The amount of statutory redundancy pay to which an employee is entitled depends on:

  • how many complete years they have been employed at the date that they are made redundant;
  • their age at the date of redundancy; and
  • how much they are paid.

It is paid at the rate of:

  • one and a half week’s pay for each full year the employee was aged 41 or older;
  • one week’s pay for each full year the employee was 22 or older but younger than 41; and
  • half a week’s pay for each full year that the employee was younger than 22.

The number of years’ service that is taken into account in calculating statutory redundancy pay is capped at 20 and is counted back from the date of the redundancy. This works in the employee’s favour as the rate at which statutory redundancy is paid increases with age.

Pay is also capped. For 2020/21, the cap is set at £538 per week, meaning that the maximum statutory redundancy pay that is payable for 2020/21 is £16,140 (£538 x 1.5 x 20).

Pay and furloughed employees

Where an employee has been furloughed and a grant claimed under the Coronavirus Job Retention Scheme, the employee may only be receiving minimum furlough pay of 80% of their pay to a maximum of £2,500 per month, rather than their usual pay.

However, when working out an employee’s statutory redundancy pay, the employee’s pre-furlough pay is used rather than their furlough pay where this is lower. This applies where the calculation date for statutory redundancy pay is on or before 31 October 2020 (the date on which the furlough scheme comes to an end).

Where the employee’s pay varies, statutory redundancy pay is based on average pay over the previous 12 weeks. Where that period includes at least one week where the employee was furloughed, the averaging calculation must be performed over 12 weeks of full pay.

Reduced rate of VAT for hospitality and leisure

Reduced rate of VAT for hospitality and leisure

The hospitality and leisure industries have been severely affected by the Coronavirus pandemic. To help businesses in these sectors to get back on their feet, a reduced rate of VAT of 5% rather than the standard rate of 20% will apply to certain supplies for a limited period, from 15 July 2020 to 12 January 2021.

Hospitality

Food and drink supplied for consumption in the premises, for example by a restaurant or a bar, and hot takeaway food and beverages are normally liable for VAT at the standard rate of 20%. During the support period, the 5% rate will apply instead to:

  • hot and cold food for consumption on the premises on which they are supplied;
  • hot and cold non-alcoholic beverages for consumption on the premises on which they are supplied;
  • hot takeaway food for consumption off the premises on which it is supplied;
  • hot takeaway non-alcoholic beverages for consumption off the premises on which they are supplied.

Hotel and holiday accommodation

For businesses supplying hotel and holiday accommodation, the 5% rate VAT applies during the support period to:

  • supplies of sleeping accommodation in a hotel or similar establishment;
  • certain supplies of holiday accommodation;
  • charge fees for caravan pitches and associated facilities;
  • charge fees for tent pitches and camping facilities.

Meals provided to guests in long-term holiday accommodation (more than 28 days) will also benefit from the reduced rate, but the hire of motor caravans will not.

Admission to attractions

The reduced rate of 5% also applies during the support period in respect of admission to certain attractions which would normally be liable for VAT at the standard rate. However, if the admission fee is exempt from VAT, this will take precedence over the 5% charge and the admission charge will remain exempt.

The temporary reduction will apply to admissions to shows, theatre, circuses, fairs, amusement parks, concerts, museums, zoos, cinemas, exhibitions and similar cultural events where these are not included in the existing cultural exemption.

Impact on flat rate scheme

VAT registered businesses using the flat rate scheme should note that some of the flat rate percentages have been reduced to take account of the temporary reduction in the rate of VAT.

Maintaining your NIC contributions record during Covid-19

Maintaining your NIC contributions record during Covid-19

The Covid-19 pandemic has meant that many people will suffer a reduction in income in 2020/21. Not all individuals are eligible for support under the Coronavirus Job Retention Scheme or the Self-Employment Income Support scheme, and those who are eligible for the grants will not generally receive their full pay.

Where income drops this may have an effect on the National Insurance contributions payable and the individual’s contributions record, which in turn determines their entitlement to the state pension and contributory benefits. A person reaching state pension age on or after 6 April 2016 needs 35 qualifying years to receive the full single tier state pension.

Employees

Employees build up their entitlement via the payment of primary Class 1 National Insurance contributions. For a year to be a qualifying year, the employee must have been paid or credited with National Insurance on earnings equal to 52 times the lower earnings limit. For 2020/21, the lower earnings limit is £120 per week – 52 times this is £6,240. Where earnings are between the lower earnings limit and the primary threshold (set at £189 per week for 2020/21) contributions are payable at a notional zero rate, so the employee gets the benefit but does not have to pay anything.

Missed weeks need not be a problem in themselves, as long as contributions are paid or deemed to have been paid on earnings of £6,240 for 2020/21. However, where the employee earns just above the lower earnings limit, being furloughed or taking unpaid leave can cause earnings on which contributions are paid to drop below the magic level, with the result that the year is not a qualifying year.

Where a person is out of work for a period, depending on whether they receive benefits and what benefits they receive, they may get Class 1 National Insurance credits, which will serve to protect the year. Credits are also paid to those claiming child benefit.

The self-employed

Although the self-employed pay both Class 2 and Class 4 National Insurance contributions, it is the payment of Class 2 contributions (at £3.05 per week for 2020/21) that provides state pension and benefit entitlements. Where earnings are below the small profits level, set at £6,475, the self-employed earner is entitled but not liable to pay Class 2 contributions. If the earner opts not to pay Class 2 contributions (and does not pay sufficient Class 1 or receive NIC credits), the year will not be a qualifying year.

To pay voluntarily or not to pay

If a person already has 35 qualifying years or is likely to do so by the time that they reach state pension age, missing a year will not adversely affect their state pension entitlement. However, if they have less than 35 years (and will be able to reach the minimum 10 years needed for a reduced state pension by the time that they reach state pension age) making voluntary contributions can be worthwhile.

Those with earnings from self-employment of less than the small profits threshold (£6,475 for 2020/21) can pay Class 2 contributions voluntarily. At only £3.05 per week for 2020/21 this is a cheap and worthwhile option.

Where there are no earnings from self-employment, paying voluntary contributions means paying Class 3 contributions at £15.30 per week for 2020/21.

Bonus for retaining staff when CJRS comes to an end

Bonus for retaining staff when CJRS comes to an end

The Coronavirus Job Retention Scheme (CJRS) has provided a lifeline to millions of employees and their employers during the Covid-19 pandemic. As at 19 July 2020, 9.5 million employees had been furloughed by 1.2 million employers, benefitting from support totalling £29.5 billion.

As with all good things, the CJRS must come to an end. The scheme is now is its second and final phase, which runs from 1 July 2020 to 31 October 2020. This phase provides a transition from Government support to employers once again meeting the costs of employing their employers. From 1 July 2020, furloughed employees can return to work on reduced hours under the flexible furlough rules, with employers paying the employees as usual for the hours that they work and claiming a grant under the CJRS for the remainder of their normal hours. Employees who were not furloughed for at least three consecutive weeks prior to 1 July 2020 are not eligible for a grant under the scheme from July onwards (unless the employee returns from statutory leave).

During the final phase of the scheme, employees will continue to receive 80% of their pay up to the equivalent of £2,500 a month – this is known as minimum furlough pay.

From 1 August 2020, the financial support provided under the scheme starts to reduce. For claim periods on or after 1 August 2020, employers cannot claim back the employer’s National Insurance and minimum pension contributions on grant payments but must instead meet these costs themselves. For September, employers can only claim 70/80th of the employee’s minimum furlough pay; this reduces to 60/80th for October. However, furloughed employees will continue to receive their minimum furlough pay, with the employer making up the shortfall.

Job Retention Bonus

When the scheme comes to an end, employers will need to assess their staffing requirements and decide whether they can bring furloughed employees back to work. The Government are keen that they do. To encourage employers to retain furloughed employees, they will pay a Job Retention Bonus of £1,000 for each furloughed employee who is employed continuously from the end of the CJRS until 31 January 2021. To qualify for the bonus, the employee’s earnings during this period must, on average, be at least equal to the lower earnings limit for Class 1 National Insurance purposes, set at £120 per week (£520 per month) for 2020/21. The Government will pay the bonuses from February 2021.

Reclaim SSP for Covid-19 absences

Reclaim SSP for Covid-19 absences

Small employers can now reclaim statutory sick pay (SSP) paid to employees who were absent from work due to the Coronavirus. The online claim service went live on 26 May 2020.

Employers can use the scheme to claim back SSP paid to an employee who is eligible for SSP due to Coronavirus if:

  • they have a PAYE payroll scheme that was in operation on 28 February 2020; and
  • they had fewer than 250 employees at that date.

Qualifying absences

SSP can only be reclaimed where the employee’s absence relates to Covid-19; where the absence is for another reason, the employer must meet the cost of any SSP paid. An absence counts as a Covid-19 absence if the employee is unable to work because:

  • they have Coronavirus;
  • they are unable to work because they are self-isolating because they live with someone who has Coronavirus symptoms; or
  • they are shielding and have a letter from the NHS or GP telling them to stay at home for at least 12 weeks.

Claims can be made for periods of sickness on or after 13 March 2020 where the employee has Coronavirus symptoms or is self-isolating because a member of their household has symptoms and for absences on or after 16 April 2020 where the employee was shielding.

Maximum claim

The employer can claim back the SSP paid in respect of qualifying Covid-19 absences up to a maximum of two weeks’ SSP per employee. Where the employer pays more than the weekly rate of SSP, rebates must be claimed at the SSP rate — £95.85 per week from 6 April 2020 and £94.25 per week previously.

Evidence and records

Employers do not need to get a Fit note where an employee is off work due to Coronavirus. However, you can ask for an isolation note from NHS111 where the employee is self-isolating or a letter from the NHS or the employee’s GP where the employee is shielding.

Records should be kept of the dates of absence, the SSP paid to each employee, their National Insurance number, the reason for their absence and, where provided, evidence in support of their absence. Records should be kept for three years from the date that the rebate is received.

Making the claim

Claims can be made online on the Gov.uk website. To make a claim, the employer will need:

  • their employer PAYE scheme reference;
  • contact name and phone number;
  • bank details (where a BACS payment can be accepted);
  • total amount of SSP paid to employees in the claim period in respect of Covid-19 absences;
  • number of employees in respect of whom the claim relates; and
  • the start and end date of the claim period.

Claims can be made for multiple periods and multiple employees at the same time. The end date of the claim is the end of the most recent pay period for which a claim is being made.