Tag: employee

FURLOUGH 5.0

Our partners at www.PayrollForNannies.co.uk  provide payroll advice for parents and nannies and have provided this content. For more advice and support please get in touch with them.

On Saturday 31st October, the government announced that the Coronavirus Job Retention Scheme (CJRS) will continue until 1 December 2020 with grants covering 80% of wages, while implementation of the Job Support Scheme (JSS) has been delayed. This change has been brought about by the lock down to be introduced from Thursday, 5 November. Many MPs felt that the JSS provided insufficient support during a lock down.

The new national restrictions will apply from 5 November to 2 December 2020, but the financial support for employers applies from 1 November as the furlough scheme operates on full calendar months. October’s wages will still only be reclaimable at 60% of nanny’s standard gross, but as of November 80% will once again be reimbursed.

How much can be reclaimed under CJRS?

The CJRS will continue in force with the same conditions as applied in August 2020. The grant paid to employers will pay for 80% of the employee’s current wages for time not worked, up to £2,500 per month. The employer must pay for all the employer’s NIC and employer’s minimum workplace pension contributions on those wages.

The employer can top-up the employee’s furlough pay at their own expense if they wish to.

Which employees qualify?

Employees who were on the employer’s payroll on 30 October 2020 will qualify to be included in CJRS claim for November; they do not have to have been included in an earlier CJRS claim. The employee must have been paid by the employer, and that pay must have been reported on a RTI return before midnight on 30 October.

Flexi furlough

Flexible furlough will be permitted alongside full-time furlough, so nannies may be brought back part-time to say, set up the premises for the lifting of national restrictions, or to prepare for Brexit.

The same rules for flexible furlough will continue to apply as they have done since 1 July, so the employee may be furloughed for a few days or hours per week. There appears to be no minimum time set for furloughed hours or working hours.

However, each furlough claim must be for a period of at least seven consecutive calendar days.

How to claim?

If you would like to furlough your nanny in November, whether or not you have chosen to do so in the past, just let us know the date from which this will start and whether or not you would like to top their wages up to full pay and we will take care of everything for you.

FURLOUGH 4.0

FURLOUGH 4.0 
Our partners at www.PayrollForNannies.co.uk  provide payroll advice for parents and nannies and have provided this content. For more advice and support please get in touch with them.

Rishi Sunak, the Chancellor of the Exchequer, announced a new raft of support measures connected to the continuing COVID-19 pandemic.  This seems to be a response to the growing lock-down and complaints that the government was not doing enough to assist businesses and their employees.

The Job Support Scheme

When originally announced, the JSS – which will come into effect on 1 November – saw employers paying a third of their employees’ wages for hours not worked and required employees to be working 33% of their normal hours.

This announcement reduces the employer contribution to those unworked hours to just 5%, and reduces the minimum hours requirements to 20%, so those working just one day a week will be eligible.

Employers will pay their staff normally for hours they work. Then, they’ll be paid two-thirds of their pay for the remaining hours (with the employer covering 5% and the government paying 95%). So people will still see lower take-home pay – we have prepared the table below.

Normal Hours                    JSS Hours                             Take home percentage of contracted hours
20%                                        80%                                        74%
25%                                        75%                                        75%
30%                                        70%                                        76%
33%                                        67%                                        77%
35%                                        65%                                        78%
40%                                        60%                                        80%
45%                                        55%                                        81%
50%                                        50%                                        83%
55%                                        45%                                        85%
60%                                        40%                                        86%
65%                                        35%                                        88%
70%                                        30%                                        90%
75%                                        25%                                        92%
80%                                        20%                                        93%
85%                                        15%                                        95%
90%                                        10%                                        97%
95%                                        5%                                          98%

The maximum payment will be £1541.75 per month. The cap is set above median earnings for employees in August at a reference salary of £3,125 per month. The employer will be reimbursed in arrears for the government contribution. The relevant employee(s) must not be on a redundancy notice.

The JSS is intended to protect viable jobs over next six months after the furlough scheme ends at the end of the month.

All small and medium-sized firms with a UK PAYE scheme and UK bank account are eligible – but large firms are only eligible if their turnover has fallen in the pandemic and can document this. The JSS is open to firms who have not used the earlier CJRS scheme.

That means that if someone was being paid £587 for their unworked hours, the government would be contributing £543 and their employer only £44.

Employers will continue to be entitled to receive the £1,000 Job Retention Bonus: https://src-time.co.uk/the-job-retention-bonus-explained/ 

Self-Employment Income Support Scheme

As part of the Winter Economy Plan, Rishi Sunak had announced an extension to the Self Employment Income Support Scheme (SEISS).

There was to be a lump sum to cover November to January next year, worth 20 per cent of average monthly profits, capped at £1,875.  There was also to be a second grant for February to April 2021of an unspecified value.

Today’s announcement sets the amount of profits covered by the two forthcoming self-employed grants from 20 per cent to 40 per cent, meaning the maximum grant will increase from £1,875 to £3,750.

Business Support Grants

The Chancellor has also announced approved additional funding to support cash grants of up to £2,100 per month primarily for businesses in the hospitality, accommodation and leisure sector who may be adversely impacted by the restrictions in high-alert level areas.

These grants will be available retrospectively for areas who have already been subject to restrictions and come on top of higher levels of additional business support for Local Authorities moving into Tier 3.

Local Authorities (LAs) will be able to support businesses in high-alert level areas which are not legally closed, but which are severely impacted by the restrictions on socialising. The funding LAs will receive will be based on the number of hospitalities, hotel, B&B, and leisure businesses in their area.

LAs will receive a funding amount that will be the equivalent of:For properties with a rateable value of £15,000 or under, grants of £934 per month.For properties with a rateable value of between £15,000-£51,000, grants of £1,400 per month.For properties with a rateable value of £51,000, grants of £2,100 per month.This is equivalent to 70% of the grant amounts given to legally closed businesses (worth up to £3,000/month).

Local Authorities will also receive a 5% top up amount to these implied grant amounts to cover other businesses that might be affected by the local restrictions, but which do not neatly fit into these categories. It will be up to Local Authorities to determine which businesses are eligible for grant funding in their local areas, and what precise funding to allocate to each business – the above levels are an approximate guide.

Businesses in Very High alert level areas will qualify for greater support whether closed (up to £3,000/month) or open. In the latter case support is being provided through business support packages provided to Local Authorities as they move into the alert level.
 
SRC-Time are one of the South East’s leading accountancy firms in advising the self-employed and partnerships in all aspects of their tax affairs and we are able to assist in any issue raised above.

Benefits in Kind

Our partners at www.PayrollForNannies.co.uk  provide payroll advice for parents and nannies and have provided this content. For more advice and support please get in touch with them.

Benefits in kind are benefits which both Employers and Employees can receive from their employment, which are not included in their salary.

As an employee, you pay tax on company benefits.  The amount of tax you pay, depends on what kind of benefits you get and their value and it is the employer who deducts the amounts from the employee’s gross earnings. However, some company benefits, are tax free.

 Most common benefits in Kind for nannies are listed below:

Private Car Mileage / Fuel Allowance

– Is not a taxable benefit if the employee is using the car during working hours. If they are using the car to get to and from work and outside their normal working hours, then this would be classed as a benefit in kind.  If nanny is using their own car whilst they are at work, up to 0.45p per mile is tax free.  Anything above this amount would be classed as a benefit and kind and will need to be reported to HMRC.

Private Medical Insurance

Subscriptions and Professional Fees

  • Such as paying for nanny’s Ofsted registration, DBS check, Nanny’s Public Liability Insurance

Living Accommodation

If you are providing living accommodation where the nanny has separate living quarters to the employer, this is classed as a benefit in kind, along with any bills and furniture you provide

Beneficial loans – Interest free or low interest

  • Any low –interest or interest free loans above the value of £10,000 are a Benefit in Kind.

Flights – which do not include family holidays if you are taking the nanny with you

Any declarations for Benefits in Kind need to be submitted to HMRC via for P11(D) by 6th July each year.  As an employer, there will be Class 1A National Insurance of 13.8% on the taxable benefit.

For more help and advice on this or any other payroll related matter please contact our recommended partners Payroll for Nannies https://www.payrollfornannies.co.uk/

SMP Statutory Maternity Pay

All nannies are entitled to take up to 1 year off for maternity leave whether paid or unpaid.

How much SMP does employee get?

Of the 1-year entitlement nanny only gets paid for the first 39 weeks and should she take further 13 weeks off these are unpaid.

1st 6 weeks are paid at 90% of employee’s gross salary.

Remaining 33 weeks are paid at £148.68 or the 90% figure whichever is the lower amount.

Qualification for SMP

Nanny needs to have been employed by you 41 weeks before her due date.

Nanny needs to be earning above the lower earnings limit £118.00 gross per week.

Nanny needs to still be in your employ 15 weeks before her due date.

Processing SMP

Nanny will be issued form MATB1 from her Doctor or Midwife this form will have the due date and from this due date you can then determine whether she qualifies for SMP or not, if not you then need to issue nanny with form SMP1, so she can then claim maternity allowance directly from the state.

Cost of SMP

Small employers can usually claim back 103% of any SMP, this is 100% of the SMP itself and an additional 3% compensation to help towards cost of employers NI.

2019-2020 National Insurance Changes

Our recommended partners at www.PayrollForNannies.co.uk  provide payroll advice for parents and have created this content.

Parents, as an employer of a nanny, you will need to pay HMRC employee and employer Class 1 National Insurance based on your nanny’s wage.

Employee national insurance is deducted from your nanny’s gross salary, whereas employer’s National Insurance is an additional cost on top of your nanny’s gross salary paid by you, the employer.

Continue reading “2019-2020 National Insurance Changes”

New Tax Level Information for Working Nannies

New tax level information for working nannies

Our recommended partners at www.PayrollForNannies.co.uk provide payroll advice for parents and have created this content.

The standard tax code for tax year (19/20) is 1250L, this then means an employee (a nanny) can earn £12,500.00 per annum before they pay any tax. This figure is then spread over the relevant pay periods in the tax year (52 if weekly and 12 if monthly) this then gives the tax-free allowance for each pay period.

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What to do if Nanny Does Not Have a National Insurance Number?

Our recommended partners at www.PayrollForNannies.co.uk  provide payroll advice for parents and have created this content.

Have you employed a nanny who doesn’t yet have a National Insurance number? Are you a nanny applying for a job but you don’t have a NI number?

Don’t worry!

Continue reading “What to do if Nanny Does Not Have a National Insurance Number?”