It’s tough to stay on top of all the changes posed by HMRC, especially in these recent challenging times posed by the pandemic and changes as a result of leaving the EU. Luckily our expert team is here to help you.
Online Payrolls Operations Director Gayle Hargie explains how her team of experts has ensured they kept up with the updates for their clients: “Whilst it’s been very hard to keep on top of the changes, we have found checking the CJRS page each morning very helpful. Registering for updates with HMRC, CIPP and our training provider The Payroll Centre has also proven helpful.”
With this in mind, we’ve put together a useful guide for small business owners, HR teams and payroll managers, outlining the changes coming up for the rest of 2020 and looking ahead to 2021.
CJRS and coronavirus business support
The government’s job support scheme, although due to end on 31 October, has been extended until 30 April 2021, following a review by the government in January (correct on 5th January 2021).
Employers only have a limited time to submit claims for claims for each month. The deadline for claiming for furlough days in December is 14 January – all claims for that month must be submitted by this date. Businesses can no longer submit claims for periods ending on or before 31 October. Full details on CJRS can be found on the HMRC portal.
To support individuals and businesses to deal with the challenges created by coronavirus (COVID-19) during this winter (2020 to 2021), the government is providing additional support to help employers retain their employees through the Job Support Scheme (JSS). This was first announced by the Chancellor of the Exchequer on 24 September 2020. You can find out more about the scheme, eligibility and how to apply in the HMRC policy paper for the Job Support Scheme.
The pandemic means that the business support available is constantly changing and evolving. To ensure you have the most up-to-date deadlines and information please visit the Government’s hub.
IR35 Reform
IR35 was first introduced in 2000 to regulate individuals providing services via a Limited Company (Ltd Co.). New ‘off-payroll’ rules were then implemented in April 2017 for the public sector organisations, which switched the responsibility of determining a contractor’s IR35 status from the contractor themselves to the engager.
These same off-payroll rules will now be extended to private sector businesses from April 2021 which will impact UK based limited company contractors.
There are a number of things you can do to prepare for these changes; the first is to check whether IR35 is applicable to your employees, clients or contractors to avoid losing access to valuable skills and client projects respectively. It is important that employers are clear on what factors need to be considered when assessing if IR35 is applicable. Conduct a full audit of all your employees, clients and contractors to determine who falls in and outside of the new rules. You can check employment status using the HMRC (CEST) tool.
You’ll find more help and guidance on preparing for IR35 in this article.
P45 and P60 stationary
For the tax year 2020-21 onwards HMRC will be removing the P45 and P60 stationery. This is part of its digitisation process. It means that employers will be expected to print or issue their own digital P45s and P60s – so their payroll software must be able to produce these electronically moving forwards. There are exemptions for those who are exempt from operating their payroll online.
New starter checklist
The updated new starter checklist was circulated earlier this year.. It includes an improved employee statement and collects information about student loans. The checklist provides three options, the chosen one dictates the tax code the new starter is placed in. You can find the updated Starter Checklist for PAYE here.
There is a lot for payroll managers to stay on top of but thankfully there are some ways to lighten the load. To avoid making payroll mistakes ensure you sign up to the HMRC Employer bulletin, this contains helpful information and gives you an insight for upcoming changes.
Gayle also advises: “Register for an annual payroll update, these are offered by organisations such as the CIPP and The Payroll Centre and contain helpful advice for the year to come.”