February 2021 update18th of February, 2021
Just to update you on some further changes and deadlines.
Budget – 3 March 2021
We will hope to issue an update after this. Thresholds and tax rates for 2021/2022 are already available but they are subject to approval via the Budget so we will notify the new rates after that. The preliminary rates are not showing any major changes, but provisionally, the standard personal allowance has been increased to £12,570 and there are minor increases in the bandings.
The Budget will no doubt address whether or not the Furlough scheme will be extended beyond 30 April 2021.
Self Employment Income Support Scheme Fourth Grant
Whether or not there is one and how much it will be, will be clarified in the Spring Budget.
Deferred VAT payments
Those payments of VAT ordinarily due between 20 March 2020 and 30 June 2020 that were deferred were originally to be paid back by 31 March 2021. However, there is now a scheme to pay back by monthly instalments as selected by the VAT payer – provided that everything is paid back in full by 31 March 2022. These instalments are interest free and the maximum number of instalments available will depend on when the scheme is set up.
The scheme will be available online via Business Gateway accounts between 23 February and 21 June 2021.
As a Direct Debit will need to be set up, Agents cannot apparently claim this for clients and it can only be claimed via a business gateway account. As this was the same mechanism for claiming the Self Employment Income Support Scheme Grants, many of you will now have these accounts in place. We can still assist by talking you through the application and we can assist any clients who have not yet set up the business gateway account but who are wishing to pay deferred VAT via instalments. Let us know!
We notified about this scheme when it was announced, but then a condition came out that it would only be available to businesses claiming for a minimum of 30 placements. However, from 3 February 2021 this requirement has been abolished and it is now possible to apply for just one apprentice. In the meantime there are Gateway organisations such as recruitment companies who have set up systems to apply for 30 apprentice places and then sub-contract them to individual employers and some clients may still prefer to use them to avoid administration.
It is possible however that we can assist with individual placements on behalf of clients, should this be of interest.
The scheme provides £1,500 per placement to the employer – intended for set up costs and to support the young person develop their employability skills and then 100% of the National Minimum Wage will be paid for 25 hours per week for a total of 6 months.
The jobs must be new jobs, so existing staff cannot be sacked or have their hours reduced in order to take on Apprentices and you must be able to demonstrate that you do help the young person to develop skills in the workplace and help them with career advice/ goal setting etc.
The young person has to be a Universal Credit Claimant aged 16 to 24. There will be forms to fill in!
Please let us know if you are interested in providing a placement under this scheme and if you would like our assistance or an introduction to an HR firm who may be able to source an apprentice on your behalf via the scheme. Clearly the scheme is designed to aid the young person at no expense to the employer – so it is incumbent on every business to consider seriously whether or not they can accommodate someone as any work experience is no doubt preferable to being unemployed and on Universal Credit at a young age!
Discretionary Business Fund
West Lothian (and other) Council’s are able to provide a one-off £2,000 hardship grant to local businesses who have been unable to benefit from any other scheme of support, provided that those businesses are not in administration or insolvent and were trading as of 17 March 2020.
This grant can be applied for on the local authority’s website.
Payroll 2021/2022 and National Minimum Wage
From 1 April 2021 the National Minimum Wage rates will be increasing. The Age bands are also changing.
The new rates will be:
Ages Hourly rates
23 and over (formerly 25 and over) £8.91
21 to 22 £8.36
18 to 20 £6.56
Under 18 £4.62
This is an increase of around 2%.
This will not affect any employees on Furlough as the furlough rates are still linked to historic pay rates.
VAT reverse charge for construction and building services
This is now coming in on 1 March 2021. We have discussed this before as the change was delayed due to Covid, but HMRC are now going ahead with it. Please contact us for further information if this applies to you.
Changes to the Construction Industry Scheme
From April 2021 there are planned changes to the scheme “to tackle Construction Industry Scheme abuse”.
Deadline for applications or extensions to Bounce Back Loan Scheme – 31 March 2021
We have advised separately about Grants under the Strategic Business Fund for businesses forced to close and also and also grants available for licensed taxi drivers.