Coronavirus Job Retention Scheme – Furlough
September 2021 will be the last month employers are able to furlough their team members and claim a percentage of their wage back from the Government.
Employers are able to claim 60% of team members wages (for hours not worked, up to a cap of £1,875) for the month of September 2021. The scheme has been wound down gradually over the last couple of months and from 01 October 2021 there will be no further support available.
You will need to ensure that your final Furlough claim for September 2021 is made by 14 October 2021.
The withdrawal of support may mean some businesses have to assess their team levels and face the tough challenge of whether they need to make redundancies.
There are some key points that must be followed when making redundancies. The main one being treating any payments on termination of employment correctly for tax and national insurance purposes. The first £30,000 paid on termination of employment is tax free, however, lots of employers get this wrong.
The first £30,000 includes:-
- Statutory redundancy pay
- Any enhancement from the employer
- Benefits such as private health insurance
However, the excess is subject to income tax and employers national insurance.
We would always recommend seeking professional advice before taking any action on redundancies.
5% VAT rate for tourism and hospitality
30 September 2021 also sees the end of the temporary 5% VAT rate applied to supplies (excluding alcohol) made in the tourism and hospitality sector.
From 01 October 2021 to 31 March 2022 the rate will increase to 12.5%. From 01 April 2022 the rate will revert back to the standard rate, currently at 20%.
For anyone supplying goods in the tourism and hospitality sectors, this will mean an amendment to their accounting software and possibly their prices. Where deposits and other payments are taken before 30 September 2021 the 5% rate would apply to that supply as that would be the tax point for the supply.
Need some help…?
The GreenStones team are always on hand to support you.
We can recommend an HR specialist to help you with all things wages and possible redundancies.
Or we can give you some advice with regards to your accounting software and VAT rates.
Simply pick up the phone and call us on 01733 371180.