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Marriage Allowance lets you transfer £1,250 of your Personal Allowance to your husband, wife or civil partner.

National Living Wage set to increase by 6.2% in 2020.

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  • Annual pay rise of up to £930 for a full time worker.
  • National Living Wage (NLW) increasing from £8.21 to £8.72.
  • New NLW rate starts on 1 April 2020 and applies to over 25 years olds.

Low-paid workers will receive a 6.2% pay rise with a new National Living Wage (NLW) of £8.72 per hour, the biggest cash increase ever, the Government has announced today.

Nearly 3 million workers are set to benefit from the increases to the NLW and minimum wage rates for younger workers, according to estimates from the independent Low Pay Commission. The rise means Government is on track to meet its current target for the NLW to reach 60% of median earnings by 2020.

The new rate starts on 1 April 2020 and results in an increase of £930 over the year for a full-time worker on the National Living Wage. Younger workers who receive the National Minimum Wage will also see their pay boosted with increases of between 4.6% and 6.5%, dependant on their age, with 21-24 year olds seeing a 6.5% increase from £7.70 to £8.20 an hour.

Prime Minister Boris Johnson said:

Hard work should always pay, but for too long, people haven’t seen the pay rises they deserve.

Our government will put a stop to that, giving nearly three million people from Edinburgh to Eastbourne a well-earned pay rise, including the biggest ever cash boost to the National Living Wage.

But that’s not all. As we enter a new decade, we’re setting our sights higher, to help people earn more over the next five years and level up access to opportunity across our great country.

Chancellor of the Exchequer, Sajid Javid, said:

We want to end low pay and put more money in the pockets of hard-working families. This latest rise will mean that since we introduced the National Living Wage in 2016, the lowest paid will have had a wage increase of more than £3,600.

But we want to do more to level up and tackle the cost of living, which is why the NLW will increase further to £10.50 by 2024 on current forecasts.

Business and Energy Secretary, Andrea Leadsom, said:

We want to make the UK the best place in the world to work and grow a business. Employment is at a record high and as well as investing to meet that ambition, we also want to make sure that people get to keep more of what they earn.

Our people’s pay rise will put more money into the pockets of millions of hard-working Brits across the country - but we won’t stop there. We want to make the UK the first country in the world to eliminate low pay in the next five years.

The Government has fully accepted the Low Pay Commission’s recommendations after they consulted stakeholders such as unions, businesses and academics, before recommending the NLW and NMW rates to the Government. In September the Chancellor pledged to increase the NLW towards a new target of two-thirds of median earnings by 2024, provided economic conditions allow, which, on current forecasts, would make it around £10.50 per hour.

The introduction of the NLW has already delivered the fastest pay rise for the lowest earners in 20 years, putting more cash into the pockets of those who need it the most. Supported by the NLW, the lowest paid saw their wages grow by 8% above inflation between April 2015 and April 2018.

The Chancellor has also announced his plans to expand the reach of the National Living Wage to cover workers aged 23 and over from April 2021, and to those aged 21 and over within five years. This is expected to benefit around 4 million low paid workers.

The Government will set out more details on the future policy framework, including the important role of the independent Low Pay Commission, by the Spring.

Further information

2020 NMW/NLW rates increases

The increased rates were recommended by the Low Pay Commission, an independent body that advises the government about the National Living Wage and the National Minimum Wage.

The National Living Wage (for over 25 year olds) will increase 6.2% from £8.21 to £8.72.

The National Minimum Wage will rise across all age groups, including:

  • A 6.5% increase from £7.70 to £8.20 for 21-24 year olds
  • A 4.9% increase from £6.15 to £6.45 for 18-20 year olds
  • A 4.6% increase from £4.35 to £4.55 for Under 18s
  • A 6.4% increase from £3.90 to £4.15 for Apprentices

The £930 increase in annual earnings compares the gross annual earnings of a person working 35 hours per week on the new NLW rate from April (£8.72) versus the 2018/19 NLW rate (£8.21). The £3,680 increase in annual earnings compares the gross annual earnings of a person working 35 hours per week on the new NLW rate from April (£8.72) versus the 2015/16 minimum wage rate (£6.70).

 

The Treasury is reportedly planning to rewrite rules governing public spending in a move that may benefit areas in the Midlands and North of England.

The changes, reported by the Times, would make it easier for cash to be allocated to projects outside of London and the South East.

It could help boost investment in infrastructure, business development projects and schemes like free ports.

The Treasury has not denied the reports.

Current rules require government to allocate cash to projects that promise the biggest economic benefits.

Those projects tend to have most impact in areas with more people and businesses.

But under the new plans, reported on Friday, investment decisions would be made with a focus on reducing inequality between northern and southern England, rather than promoting overall economic growth across the country.

It will affect decisions made about projects ranging from rail 

Analysis

By Colletta Smith, BBC business correspondent

After Boris Johnson's electoral wins in northern England, the pressure is on to deliver on promises to spend more money improving road and rail links, and increase productivity beyond the South East.

Sources at the Treasury suggest there will some big changes at the next budget this spring.

At the moment, projects are given the go-ahead based on how much money they would add per person, which favours heavily populated areas, and tends to attract more funding to London.

New rules would allow money to be spent on different criteria - improving wellbeing and productivity imbalances across the country. That includes transport schemes and scientific research and development.


"A big project in the North will often be stimulating growth, which wouldn't otherwise happen," said Henri Murison from the Northern Powerhouse Partnership, which speaks for business and civic leaders across northern England.

But, in the South, that investment will help a regional economy that is already expected to grow significantly, he told the BBC.

"If the UK is going to succeed post-Brexit, we need to get comparable levels of growth in the North and in the Midlands," he said.

'No evidence'

But Tom Forth from the Open Data Institute Leeds said the rules on value for money were not to blame for regional spending disparities.

"For as long as we have records, far more UK government money has been invested in public transport in south-east England than in the cities of north England and the Midlands," he said.

"There is no evidence that this was because investing in London offered better value for money.

"The rules say the Treasury should invest with preference to schemes with higher value for money.

"But there is no evidence that it has done that."

A Treasury spokesperson said: "We work across government to ensure investment is focused on where it is needed across the UK and delivers value for money for the taxpayer."

After his election victory, Boris Johnson thanked voters in northern England for "breaking the voting habits of generations" and placing their trust in the Conservatives.

"Everything that we do, everything that I do as your prime minister, will be devoted to repaying that trust," Mr Johnson said.

 

Spurce: https://www.bbc.co.uk/news/business-50925321

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One in five small UK businesses face closure if Christmas sales disappoint, survey suggests
 
About one in 12 say they could go out of business within weeks of new year
 

More than one in five smaller UK businesses fear that they will go out of business within 12 months if Christmas trading is below average this year, a survey suggests.

About one in 12 said they would go under in a matter of weeks and 22 per cent said they will not make it through 2020 if festive sales are poor.

A quarter of small British businesses said Christmas sales are “very important or vital” to their survival.

The survey for Notonthehighstreet found that although 85 per cent of shoppers in the UK say they support smaller firms, a third have not purchased anything from one in the past six months.

Just a quarter of Christmas spending is expected to go to small firms this year, with larger corporations and chains taking the rest.

Claire Davenport, chief executive of Notonthehighstreet, said the figures suggest that shoppers may not be “putting their money where their mouth is” when it comes to supporting local firms.

She said: “It’s clear that many smaller businesses are heavily reliant on the Christmas trading period, and a below-average Christmas could put them in a precarious situation when it comes to the long-term viability of their company."

Christmas sales are always important for small and large retailers alike, but this year is seen as particularly critical after a year of insolvencies and store closures.

In the six months to September, 44 retail businesses went into administration, including Sir Philip Green’s Arcadia, data from KPMG shows.

Major retailers shut almost 6,000 shops in the first nine months of the year, up 77 per cent on the total for the whole of 2018, according to separate figures compiled by the Centre for Retail Research.

Large bills for business rates remain a key issue for many retailers, with each of the major parties pledging to review the system if they win power in next week’s election.

However, few details have emerged in the manifestos, with the Conservatives vowing to “further reduce business rates for retail businesses”, while Labour says it will “review the option of a land-value tax on commercial landlords as an alternative and develop a retail-sector industrial strategy.”

Labour also plans to “revive high streets by stopping bank branch closures, banning ATM charges and giving local government new powers to put empty shops to good use”.

Spurce: https://www.independent.co.uk/news/business/news/christmas-sales-uk-businesses-close-next-year-2020-a9229171.html#r3z-addoor

 

Overview

As an employer providing holidays for your employees, you have certain tax, National Insurance and reporting obligations.

What’s included

What you have to report and pay depends on whether you:

  • provide a holiday, or vouchers that can be exchanged for a holiday
  • arrange the holiday yourself, or your employee does
  • pay for the holiday directly, or your employee pays for it and you pay them back

What to report and pay

What you have to report to HM Revenue and Customs (HMRC) depends on who arranges and pays for the holiday.

Holiday vouchers

If you provide your employees with vouchers they can exchange for a holiday, you must:

Holidays you pay for directly

If you arrange the holiday, you must:

If your employee arranges the holiday, you must:

Holidays your employees arrange and pay for, and you pay them back

This counts as earnings, so you’ll need to:

  • add the amount you pay the employee to their other earnings
  • deduct and pay PAYE tax and Class 1 National Insurance through payroll

Salary sacrifice arrangements

If the cost of the holiday is less than the amount of salary given up, report the salary amount instead.

These rules don’t apply to arrangements made before 6 April 2017 - check when the rules will change.

 

 

2.1 What is the Flat Rate Scheme?

The Flat Rate Scheme is designed to simplify your records of sales and purchases. It allows you to apply a fixed flat rate percentage to your gross turnover to arrive at the VAT due.

Fixed rate percentages vary depending on the type of business.

2.2 How will it help me?

The main benefits of the scheme are:

  • simplified record keeping, as you do not have to keep detailed records of sales and invoices
  • fixed rate percentages that are lower than the standard rate
  • it helps manage cash flow

2.3 Will all businesses benefit?

Not every business will benefit from the scheme:

  • if your customers are VAT registered you will have to calculate the VAT and issue VAT invoices in the normal way
  • for businesses who buy and sell goods from outside the UK, the scheme may become more complex, (see paragraph 6.4)
  • if you usually claim input tax, (see paragraph 2.4)

Also, as the flat rates are averages, you may pay more VAT on the Flat Rate Scheme than you would on normal accounting.

2.4 What about input tax?

If you use the Flat Rate Scheme, you do not recover input tax or VAT on imports or acquisitions. This is because the flat rates are calculated to represent the net VAT you need to pay to HMRC. In other words, an allowance for input tax is built into the flat rates.

There are special rules when you buy high value capital goods, section 15 explains how you can claim back the VAT on these purchases.

2.5 Who can join the scheme?

The scheme is for businesses with a turnover of no more than £150,000 a year, excluding VAT. There are some additional rules to stop abuse of the scheme. If you want to know more section 3 explains the joining conditions in more detail.

The Flat Rate Scheme is a simpler method of working out the VAT you have to pay to HMRC and so is unsuitable where you regularly receive repayments from HMRC.

2.6 How do I join?

You can apply by post, phone or email, section 5 gives full details.

2.7 Can I combine the Flat Rate Scheme with other schemes?

This table shows which other schemes you can use with the Flat Rate Scheme.

Scheme May be used with Flat Rate Scheme? Further information
Annual accounting Yes Combining the Annual Accounting Scheme with the Flat Rate Scheme can mean you spend less time working out how much VAT you owe, avoid a big bill by evening out your VAT over the year and submit only one VAT Return a year.

If you wish to join both schemes, Annual accounting (VAT Notice 732) contains a joint application form.

If you are already using one of the schemes and wish to use the other, complete the form for the scheme you have not yet joined.
Cash accounting No The Flat Rate Scheme has its own cash based method that is very similar to the Cash Accounting Scheme – see section 9.
Retail schemes No The Flat Rate Scheme has its own retail based method that is very similar to ordinary retail schemes.

If you want to leave a retail scheme to join the Flat Rate Scheme, simply follow the rules about ceasing to use the retail scheme in Retail schemes (VAT Notice 727).
Margin Scheme for second-hand goods No If you sell a significant proportion of second-hand goods using margin schemes or the Auctioneers’ Scheme, the Flat Rate Scheme will be of limited value to your business. This is because the Flat Rate Scheme calculates VAT on the total received for your sale rather than on the margin.

source: https://www.gov.uk/government/publications/vat-notice-733-flat-rate-scheme-for-small-businesses/vat-notice-733-flat-rate-scheme-for-small-businesses

 

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You could get up to £3,000 a year off your National Insurance bill if you’re an employer.

What you’ll get

The allowance will reduce your employers’ (secondary) Class 1 National Insurance each time you run your payroll until the £3,000 has gone or the tax year ends (whichever is sooner).

You can only claim against Class 1 National Insurance you’ve paid, up to a maximum of £3,000 each tax year. You can still claim the allowance if you pay less than £3,000 a year.

Eligibility

You can claim Employment Allowance if you’re a business or charity (including community amateur sports clubs) paying employers’ Class 1 National Insurance.

You can also claim if you employ a care or support worker.

If you have more than one employer PAYE reference, you can only claim Employment Allowance against one of them.

If you’re part of a group, only one company or charity in the group can claim the allowance.

You cannot claim if:

  • you’re the director and the only employee paid above the Secondary Threshold
  • you employ someone for personal, household or domestic work (like a nanny or gardener) - unless they’re a care or support worker
  • you’re a public body or business doing more than half your work in the public sector (such as local councils and NHS services) - unless you’re a charity
  • you’re a service company working under ‘IR35 rules’ and your only income is the earnings of the intermediary (such as your personal service company, limited company or partnership)

How to claim

To claim through your payroll software, put ‘Yes’ in the ‘Employment Allowance indicator’ field next time you send an Employment Payment Summary (EPS) to HM Revenue and Customs (HMRC).

If you use HMRC’s Basic PAYE Tools:

  1. Select the correct name in the ‘Employer’ menu on the home page.

  2. Select ‘Change employer details’.

  3. Select ‘Yes’ in the ‘Employment Allowance indicator’ field.

  4. Send your EPS as normal.

You only need to claim Employment Allowance once. Your claim will continue until you stop it.

Stopping your claim

If you stop being eligible, select ‘No’ in the ‘Employment Allowance indicator’ field in your next EPS.

Do not select ‘No’ just because:

  • you’ve reached the £3,000 limit before the end of the tax year - this does not make you ineligible
  • you’re no longer employing anyone - wait until the next tax year, then select ‘No’

If you stop your claim before the end of the tax year (5 April), any allowance you’ve been given that year will be removed. You’ll have to pay any employers’ Class 1 National Insurance due as a result.

When to claim

You can claim at any time in the tax year.

If you claim late and do not use your Employment Allowance against the Class 1 National Insurance you’ve paid, you’ll have to ask HMRC to do one of the following:

  • use any unclaimed allowance at the end of the year to pay any tax or National Insurance you owe (including VAT and Corporation Tax if you do not owe anything on your PAYE bill)
  • give you a refund after the end of the tax year if you do not owe anything

You can see how much Employment Allowance you’ve used in your HMRC online account.

Claiming for past years

You can claim Employment Allowance for a previous tax year, dating back to the 2015 to 2016 tax year. Employment allowance was £2,000 before April 2016.

Read ‘Claiming Employment Allowance: further employer guidance’ for more information.

source: https://www.gov.uk/claim-employment-allowance??utm_source=HMRCBusiness&utm_medium=OwnedTwitter&utm_campaign=Employers

 

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Find out what grants you can apply for to get funding for recruitment, training and IT improvements if your business completes customs declarations.
 

You can apply for 3 grants to help your business complete customs declarations, in preparation for the UK leaving the EU.

You can apply to get funding for training that helps your business to complete customs declarations and processes.

Additionally, if you are a customs intermediary, you can get funding for:

  • hiring new staff to help your business complete customs declarations
  • IT improvements to help your business complete customs declarations more efficiently

Who can apply

Your business must:

  • be established in, or have a branch in the UK when the grant is paid to you
  • not have previously failed to meet its tax obligations – we’ll check our records to decide if we can offer your business a grant

You can apply for just one of the grants, or all of them.

Recruitment grant

To apply for the grant, your business must:

  • currently complete customs declarations on behalf of importers and exporters
  • have been established in the UK for at least 12 months

Training grant

To apply for the training grant, your business must either:

  • complete customs declarations for yourself or someone else (or intend to in the future)
  • import from, or export to the EU and complete customs declarations (or intend to complete customs declarations in the future)

IT improvements grant

To apply for the IT improvements grant, your business must:

  • currently complete customs declarations for importers and exporters
  • have 250 employees or fewer
  • have an annual turnover of less than €50 million

What you must use the grants for

Recruitment

You must use the funding to cover the recruitment and salary costs of new employees from 1 October 2019, who will help your business complete customs declarations.

Training

The training must give you or your employees the skills to:

  • complete customs declarations
  • carry out customs processes – this can include relevant training in safety and security
  • help other businesses with import and export processes

The training does not have to lead to a formal qualification.

If you want to arrange the training internally, you can use the funding for the cost of delivering the training, like related stationery, room hire and catering.

If the training will be delivered by an in-house trainer, you can also use the funding to cover the (reasonable) day rate of the trainer.

You cannot use the funding:

  • towards the existing costs of current training
  • for other unrelated training

You can also use the grant to reimburse what your business has spent on relevant training since 31 July 2019.

IT improvements

You must use the funding to buy software that will help your business to complete customs declarations more efficiently.

It must be a ready-made solution - you cannot use the funding to commission bespoke software.

You can also use the funding to:

  • buy hardware that’s needed for the software to run
  • install and configure the software and hardware
  • buy the first year licence
  • train employees to use the software

You cannot use the funding for unrelated networking costs.

You can also use the grant to reimburse what your business has spent on relevant IT improvements since 31 July 2019.

Amounts of funding available

Recruitment grant

The grant will give you £3,000 for each employee.

You could also get up to £10,000 for any employee you recruit before before 31 January 2020, to cover up to 3 months’ salary.

You will receive the funding for recruitment costs and 50% of the eligible salary costs upfront. The remaining 50% of salary costs will be paid when the employee has been in post for one month.

Training grant

The grant will give you up to 100% of the cost of training for your employees, up to a limit of £2,250 for each course.

It will also cover the cost of training you run internally, up to a limit of £250 for each employee on the course.

IT improvements

The grant will give you up to 200,000 euros (the maximum amount of state aid available).

What you’ll need

When you apply, you’ll be asked for your business’s:

  • registered name and number
  • contact details
  • VAT number (if this applies)
  • Unique Taxpayer Reference (UTR)
  • most recent utility bill

Depending on which grant you’re applying for, you’ll also need to provide some information about what you’ll use the funding for.

Recruitment

You’ll be asked to complete a short application setting out how the money will be used. You’ll need to give information about:

  • why you expect your business to need more staff
  • the stage your recruitment process is at
  • your reasons for expecting to have any new staff employed before 31 January 2020

To get the second 50% of eligible salary costs, you’ll need to provide for each new employee:

  • their contract of employment
  • first month payslip

Training grant

You’ll be asked for:

  • a quote for the cost of the training
  • the CV of the trainer if the training will be delivered internally

IT improvements grant

You’ll be asked for:

  • details of the software you intend to buy
  • quotes for the cost of:
    • buying and installing the software
    • buying and installing related hardware
    • training employees to use the software

How to apply

PricewaterhouseCoopers (PwC) is administering the grants for HMRC.

Apply online through PwC.

After you’ve applied

If your application is successful you’ll get a grant offer letter.

You’ll need to submit proof of how much you’ve spent on IT improvements or training within 2 months of getting the grant offer letter.

You’ll then get the grant within 30 days. It’ll be paid by Bacs to a UK bank account in the name of the person who applied.

How to treat the grants for tax

When calculating your business’s taxable profits, you need to match the treatment of the grant to the expense covered by the grant. For example, if the training expense is deductible, then you should include the amount of grant in your calculation of taxable profits so that the expense is offset.

If your business has spent more on capital expenditure (like IT equipment) than is covered by the grant, you can get capital allowance on the amount not covered by the grant.

Your business cannot get capital allowance on the amount of grant covering the cost of your business’s capital expenditure.



hashtag#greatjob hashtag#tax hashtag#iht hashtag#trusts hashtag#investment
 

If you cannot afford to make payments

You can apply for HM Revenue and Customs (HMRC) to pay you in advance if you cannot afford to make statutory payments.

How to apply for advance payment

Apply online to be paid in advance for:

  • Statutory Maternity Pay (SMP)
  • Statutory Paternity Pay
  • Statutory Adoption Pay
  • Statutory Shared Parental Pay (ShPP)

You can apply up to 4 weeks before you want the first payment - HMRC may return your application if you apply earlier.

You can be charged a penalty (up to £3,000 per employee for each tax year) if you include incorrect information in your application.

Paying back your advance payment

Send an Employer Payment Summary (EPS) for each pay period you reclaim statutory payments - even if you got an advance payment from HMRC to cover statutory payments to your employees.

If the statutory payments you reclaim are more than your PAYE deductions for that month, HMRC will automatically use what’s left to reduce what you owe on your advance payment.

Example

You have £2,500 in PAYE deductions to pay after sending your Full Payment Submission (FPS).

You reclaim £3,000 in statutory payments in your EPS.

Your advance payment will be reduced by £500 (£3,000 minus £2,500).

If you still owe HMRC anything at the end of the period the advance covers, pay them by that month’s normal payment date.

Advance funding for previous tax years

To apply for advance funding for a statutory payment relating to a previous tax year that you’ve not paid yet, write to HMRC.

HM Revenue and Customs
Corporate Treasury
BX9 1BG

What to include in your application

Your HMRC account information:

  • your Accounts Office reference - you’ll find this on the cover of your P30BC payment booklet or P30B letter ‘Paying PAYE electronically’
  • your PAYE reference - you’ll also find this on your P30BC payment booklet, or letter headed ‘New employer registration and reference numbers’

Details of your application:

  • the name and National Insurance number of the employee you’re making the statutory payments to
  • the date the employee started employment with you (in TUPE cases the date they started employment with the business, not the date you took over)
  • the dates your claim relates to
  • details of any reduction to your monthly or quarterly payments that you’ve made
  • the total you’re entitled to reclaim
  • the amount you’re claiming advance funding for

Specific information for the relevant statutory payment:

  • for maternity and adoption pay, the expected date of birth or adoption
  • for paternity pay, the actual date of birth or adoption
  • for adoption pay, whether the adoption is in the UK or overseas
  • for Additional Statutory Paternity Pay, the date the mother or joint adopter returns to work and stops getting Statutory Maternity Pay, Maternity Allowance or Statutory Adoption Pay

You should also include:

  • the date your business started (in TUPE cases, the date the business started, not the date you took over)
  • your contact details - for example name, telephone number
  • details of the bank account you’d like HMRC to pay into - include sort code, account name and number (or building society roll number)

If you’re insolvent

HMRC will pay Statutory Maternity, Paternity or Adoption Pay if your employees were getting these payments when you become insolvent.

HMRC will also pay maternity pay for pregnant employees who have passed the qualifying week but have not started getting SMP.

You (or someone else like the administrator or liquidator) must contact the National Insolvency Unit and tell them you’re insolvent.

National Insolvency Unit Helpline
Telephone: 0300 0540 808
Monday to Thursday, 8:30am to 5pm
Friday, 8:30am to 4pm
Find out about call charges

You must also tell your employee to call the Statutory Payment Disputes Team.

Statutory Payment Disputes Team
Telephone: 0300 0560 630
Find out about call charges

source: https://www.gov.uk/recover-statutory-payments/if-you-cant-afford-to-make-payments?utm_source=HMRCBusiness&utm_medium=OwnedTwitter&utm_campaign=Employers

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