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Parfitt Cresswell Employment Law Bulletin 6
Parfitt Cresswell • August 7, 2020
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Furlough Bonus Scheme and claiming back home working expenses
Furlough Job Retention Bonus
In the Chancellor’s summer statement on 8 July he announced that the furlough scheme would not be extended beyond 31 October 2020, with a view to encouraging people to return to work.
Although opposition parties have been calling for an extension to the scheme to help avoid any ‘cliff edge’ that forces employers to make redundancies from November onwards, the new Governor of the Bank of England has recently put on record his support for the scheme ending as planned in October.
To soften the blow and to further support employers who bring employees back to work, the Chancellor also announced a new scheme that would pay employers £1,000 for each employee they bring back from furlough. This is a scheme intended to support employers and incentivise them for retaining employees once the scheme ends (rather than this being any type of ‘bonus’ for employees).
The detail behind this scheme was initially scant, as has been the case for the majority of the ‘support scheme’ announcements made during the pandemic, with further details promised later.
On 31 July, more detail was published in a policy paper, with an expectation that the full detail will be published in September, including the practicalities of how to make a claim.
What we know so far
The bonus will only be payable for employees who were eligible for the furlough scheme, and any fraudulent applications will be investigated, and suspect claims withheld.
The employee must have been continuously employed from the date of the most recent claim until at least 31 January 2021.
Employers will be able to claim this ‘bonus’ from February 2021.
To qualify, employees need to have been earning an average of £520 per month between 1 November 2020 and 31 January 2021. The employee does not need to earn £520 each month, but must have received some earnings each month and these must be recorded through HMRC Real Time Information (RTI)
If notice has been served (contractual or statutory), the bonus will not be paid even if the employee is still employed on 31 January 2021. Likewise, employees who submit their resignation prior to this date may prevent their employer from claiming the £1,000 bonus.
This payment will be taxable as the employer must include the full amount as income when calculating their taxable profits for either corporation tax or self-assessment.
This scheme is more likely to be attractive to employers with employees on lower salaries, but even then it is questionable how much of an incentive £1,000 will provide to bring employees back for three months, when the costs of doing so are likely to far outweigh this. It may ultimately just end up rewarding employers who were already looking to bring their employees back anyway and provide little incentive for those who are not sure if it is financially viable to bring employees back.
Claiming expenses for working from home
As many employees continue to work from home, possibly for some time into the future, it is useful for employees to be aware of when and how they are able claim expenses for the additional household expenses incurred.
Generally, where directors and employees are required to work from home, they can claim a tax deduction for household expenses incurred as a result of this. The HMRC have confirmed that having to work from home as a result of Covid 19 is likely to qualify as ‘a requirement of the job’, with the employee therefore able to claim a tax deduction for any household expenses not already being reimbursed by their employer.
Distinguishing between the additional household expenses incurred because of work and any non-work household costs can in reality be quite difficult. However, a simplified system exists where employees can claim a flat rate of £6 per week. If any employees’ additional costs are likely to be significantly higher than this, it may be worth considering the more complex ‘apportionment’ system, but otherwise the £6 per week is a good alternative.
This £6 per week can be paid either by the employer directly, or by the employee claiming tax relief of £6 per week, with this amount being deducted from the employee’s taxable income. This simplified payment will not require receipts to be kept or proof to be provided, but if the employee wishes to claim an amount higher than this, then evidence of the additional household expenses as a result of working from home will be required.
With many firms facing financial difficulties at present, the employee making the claim themselves may be the preferred option for many employers,
How to claim?
This can be claimed either through a self-assessment form (if required to complete one) or alternatively by using an P87 form either online via the government gateway or through the post.
Many employees will be unaware of this potential way of offsetting some of their additional expenses incurred through working from home, so even if employers are not willing or able to make the £6 per week contribution themselves, it may be worth sharing the details of how employees are able to benefit from this by making their own notification to the HMRC.
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LinkedIn is a key channel for personal branding, so your LinkedIn profile is the launchpad to building a strong professional network. The channel is also the place to be if you wish to continue relationships of key people you meet at zoom networking events allowing you to easily stay in touch after making the effort to attend the meeting. As well as being the touchstone for nurture and lead generation a well optimised LinkedIn profile is on the same level as making a good first impression when you meet in person. How do you optimise your profile? 1. Make sure you have a current and professional head and shoulders photograph of yourself. You are on the platform to do business so ensure you appear to be there for that reason so a picture with your partner, favourite pet or vehicle doesn’t cut it. It should be a current photograph as it could be embarrassing putting a ten-year-old photo on the platform and when you meet a contact in person you look nothing like your photo so it could end up being a little like a bad first date. Be authentic. 2. Also use Canva.com to create a background image as why miss the opportunity to promote your business. If you have staff on LinkedIn create an image for all of them to use as their background as it’s a little like giving them all a company vehicle with no costs attached. 3. Treat your LinkedIn profile as an online resume and ensure you complete every section – a. The about section – I split this into two sections i. My Background ii. What I Do Now iii. Include an email and phone number at the bottom of this section b. Experience – show at least the last two positions c . Education d. Licences and Certifications e. Skills and Endorsements – You can have 50 of these so put in as many as you can for example if you were a bar person you could include customer service. f. Recommendations – request these from people you know 4. Use keywords in your headline – think of the words you would use if you were looking for your goods or services. 5. Join groups which could be a. Within your industry b. Where your target market is c. Services you have an interest in If you require any help or advise we offer training or talk you through the process via zoom. Blog written by Linda Cloke of We Do Social Media Ltd Contact: Linda@wedosocialmedia.co.uk or call 07769943756
According to the Health & Safety Executive, over 11 million workdays are lost each year due to stress at work! The latest Employment Law Bulletin from our sponsors Parfitt Cresswell Solicitors focuses on the topic of stress in the workplace and the actions that employers can take to defend themselves against claims arising from this. In the Employment Law Bulletin expert Philip Luff covers: • What stress is • The duties of an employer • The potential action that an employee can bring against their employer for work related stress, and offers tips on how employers can best protect themselves against workplace stress claims To read the article and find out more about Stress Related Claims in the workplace click here . If you would like legal advice regarding an Employment Law matter take advantage of Parfitt Cresswell Solicitors’ complimentary initial video/telephone consultation with one of their legal experts. Call 0800 999 4437 or email enquiries@parfittcresswell.com today to arrange your free initial consultation.
This article is brought to you by Parfitt Cresswell Solicitors Extension of the Furlough Scheme (CJRS) On Saturday 31st October the Prime Minister announced a further national lockdown in England to address the increasing rate of Covid-19 infections throughout the UK. This lockdown commenced on 5th November and will remain in place until at least 2nd December 2020. Under the previous tiered ‘local’ lockdown arrangements, the Government had announced two Job Support Schemes which were intended to succeed the Coronavirus Job Retention Scheme (furlough scheme). These schemes were known as the ‘JSS Closed’, aimed at businesses that had been forced to close under the tiered restrictions and the ‘JSS Open’, a scheme for businesses who although affected by Covid-19, were still able to open. These schemes were due to replace the existing furlough scheme when it ended on 31 October 2020, with the Government support significantly reduced when compared with the original CJRS. However, along with the announcement of a national lockdown throughout November, it was also announced that the CJRS would be extended for a further month. A few days after this, the Chancellor announced that this extension of the furlough scheme would now run until the end of March 2021. As such, the JSS is not likely to resurface until at least April 2021 (if at all). How had furlough changed By way of a reminder, the CJRS has been through several changes since its introduction in March 2020, from the Government initially funding 80% of an employee’s salary up to £2,500, with government support reducing in recent months as restrictions eased. In October 2020, the month before the scheme was due to end, the government contributed 60% of unworked hours up to a cap of £2,187.50, with the employer paying the additional 20% along with employer national insurance and pension contributions. How will the extension work? In simple terms, the extension of the Furlough Scheme puts employers back to the same level of government contributions that were available in August 2020, with the Government funding 80% of eligible employees’ salary, but the employer having to contribute both employer national insurance/pension contributions themselves. The current understanding is that the furlough extension will operate largely as it did before, however the following now applies: • The extended scheme will run until 31 March 2021. • The employer or employee are not required to have previously used the CJRS • To be eligible, the employee must have been on the employer’s PAYE payroll by 23.59 on 30 October 2020 and the employer must have made a Real Time Information (RTI) submission for that employee by that date. • The employee can be furloughed either full-time or flexibly (for part of their hours). Employers will need to report and claim for a minimum period of seven consecutive calendar days. • The government will pay 80% of eligible wages for any unworked hours, (up to a cap of £2,500) with the employer paying employer NIC and pension contributions on these unworked hours. Employers will need to pay the employees for any hours worked as per usual. • The employer can choose to top up to 100% if they wish but is not obliged to. • The Job Retention bonus for employers (£1,000 for each employee kept on until the end of January 2021) will no longer be able to be claimed in February as planned, but will possibly be introduced at a later date to help avoid the impact of the furlough scheme ending. • The Government will review the scheme in the New Year, so it is still possible that increased employer contributions could be required prior to the end of March. As with all these announcements, further detail and guidance will follow from the government in due course. If you require further legal assistance regarding the CJRS or and other employment law issue, take advantage of our complimentary initial consultation (available via telephone or video call) today by calling 0800 999 4437 or email enquiries@parfittcresswell.com
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