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Advice regarding Coronavirus
Updated: 26 March 2020
* IMPORTANT INFORMATION *
Coronavirus Job Retention Scheme (CJRS), Furloughing employees
The Coronavirus Job Retention Scheme (CJRS) is a temporary scheme that started 1 March 2020. It is designed to support employers whose operations have been severely affected by coronavirus / COVID-19. Employers will be able to claim from the government for 80% of furloughed employees’ (employees on a leave of absence) usual monthly wage costs, up to £2,500 a month, plus the associated Employer National Insurance contributions and minimum automatic enrolment employer pension contributions on that wage.
The claim system is not yet available.
Further information on the scheme is available here.
Support for your Business
The government has announced a wide range of measures to support businesses. You can read a summary here; please remember, however, that local authorities are implementing many of these plans and well need time to put the processes in place.
Employment Guidance
ACAS has published advice for employers and employees on the potential implications on sick leave, sick pay, time away from work etc as a conseqeunce of the Coronavirus / COVID-19 and concerns around the potential implications of Coronavirus.
We advise employers to read the information available at: www.acas.org.uk/coronavirus
Statutory Sick Pay
SSP entitlement and procedures are changing to enable SSP to be paid from the first day of sickness, for SSP to be paid for those ‘self-isloating’ and also for employers to be able to recover the costs of SSP. Further information here
Claiming Benefits
The Department of Work and Pensions has published guidance on SSP and other benefits, see: www.understandinguniversalcredit.gov.uk/coronavirus
Other Guidance
There is a wealth of information available online, and this is being updated frequently. Information for businesses, support available for employers and guidance for employees is available at: www.gov.uk/government/publications/guidance-to-employers-and-businesses-about-covid-19
IR35 (Off Payroll Working) Changes Delayed
The government has announced that proposed changes to the so-called “IR35” process have been delayed from April 2020 to April 2021. See: www.gov.uk/government/news/off-payroll-working-rules-reforms-postponed-until-2021
National Minimum Wage & National Working Wage – April 2020
National Minimum Wage and National Living Wage rates
These rates are for the National Living Wage and the National Minimum Wage. The rates change every April.
| Year | 25 and over |
21 to 24 | 18 to 20 | Under 18 |
Apprentice |
|---|---|---|---|---|---|
| April 2019 (current rate) |
£8.21 | £7.70 | £6.15 | £4.35 | £3.90 |
| April 2020 new rate |
£8.72 | £8.20 | £6.45 | £4.55 | £4.15 |
Employees must be at least:
– school leaving age to get the National Minimum Wage
– aged 25 to get the National Living Wage – the minimum wage will still apply for workers aged 24 and under
Further information available on the gov.uk and ACAS websites.
Pension rate changes – April 2019
The minimum contributions the employer and your staff pay into your automatic enrolment workplace pension scheme will increase from 6 April 2019.
| Employer minimum contribution |
Staff Contribution |
TOTAL minimum contribution |
|
|---|---|---|---|
| New rate: 6 April 2019 onwards |
3% | 5% | 8% |
| Old rate: 6 April 2018 to 5 April 2019 |
2% | 3% | 5% |
By law a total minimum amount of contributions must be paid into the scheme. The employer, must make at least the minimum employer contribution towards this amount and your staff member must make up the difference. If the employer decides to cover the total minimum contribution required, your staff won’t need to pay anything.
Further information is available from your pension provider and from The Pensions Regulator:
www.thepensionsregulator.gov.uk/en/employers/increase-of-automatic-enrolment-contributions
2019 / 2020 National Insurance and Income Tax Rates
A full schedule of the National Insurance and income tax rates for the 2019/2020 income tax year, which starts 6 April 2019, is available at:
www.gov.uk/guidance/rates-and-thresholds-for-employers-2019-to-2020
National Minimum Wage & National Living Wage [April 2019]
The National Minimum Wage (NMW) is the minimum pay per hour most workers under the age of 25 are entitled to by law. The government’s National Living Wage (NLW) is the minimum pay per hour most workers aged 25 and over are entitled to by law. To further complicate, there is also a non-statutory Living Wage set by the Living Wage Foundation.
Minimum Wage Rates from 1 April 2019
| Age 25 and over | Age 21 to 24 | Age 18 to 20 | Aged under 18 [1] | Apprentice [2] | |
|---|---|---|---|---|---|
| New Rate | £8.21 | £7.70 | £6.15 | £4.35 | £3.90 |
| Old Rate | £7.83 | £7.38 | £5.90 | £4.20 | £3.70 |
[1] Aged under 18 and above compulsory school leaving age
[2] Apprentices aged under 19 and, Apprentices aged 19 and over but in the first year of their apprenticeship
Further information available at: www.gov.uk/national-minimum-wage-rates and www.gov.uk/national-minimum-wage
Information on the non-statutory Living Wage is available at www.livingwage.org.uk
National Minimum Wage & Sleep-ins
Not sure how the National Minimum Wage applies to ‘Sleep-in shifts’? HM Revenue and Customs has produced an informative ‘webinar’ available on YouTube and below:
© HMRC logo is Crown Copyright
Updated guidance on Minimum Wage and Working Wage
The Department for Business, Energy & Industrial Strategy has produced new guidance on the National Minimum Wage and the National Living Wage.
The updayed guidance, entitled “National Minimum Wage and National Living Wage – Calculating the minimum wage” includes updated information on “Sleep-in” shifts to reflect recent court rulings.
You can download the new guidance (.pdf) here.
Pension Regulator prosecutes recruitment agency
The Pensions Regulator has prosecuted a Derby based business, the Directors and senior staff for offences under the Computer Misuse Act. The seven individuals all worked together to opt workers out of the NEST pension scheme, thus depriving workers of the recruitment agency of pension scheme membership.
Derby Crown Court, Judge Nirmal Shant QC told the defendants their “co-ordinated effort” had been an “attempt to steal a march” on their competitors and that “This amounted to a deliberate subversion of the automatic enrolment process. It was a deliberate attack on the integrity of the electronic systems of NEST.”
Such was the severity of the offences, that the company was fined £200,000 plus nearly £61,000 in costs. In addition, individuals were sentenced to prison sentences (suspended), community service, overnight curfews and costs.
Further information avaialable here.
Bank Charges
If an employer reimburses or pays employees’ bank charges this counts as earnings (and is subject to income tax and National Insurance) unless the bank charges are the employers fault (eg because the employer paid the wages late). If the bank charges were the employers fault, there is no need to report the reimbursement to HMRC.
Further information at www.gov.uk/expenses-and-benefits-bank-charges
Technical information from HMRC available for income tax and National Insurance
