Acorn – Bulletin April 2021
Welcome to this our third edition of Acorn HR Services newsletter. Since the start of 2021 we have witnessed further restrictions on our personal freedom due to the COVID-19 pandemic, experiencing our third lockdown, unprecedented levels of infections from this horrible virus and unseen number of deaths and sadness caused to many people. Acorn HR have tried to keep businesses and individuals up to date with changes that may impact on all aspects of their lives, however, we are endeavouring to continue to produce our newsletter hoping that you will find the information both interesting and informative.
We have previously requested input from our subscribers regarding specific subjects that they would like us to cover in future editions.
This month we are going to cover some local business opportunities, employment legislation changes, COVID-19 update and summarise the budget for business.
news’ – Solent freeport bid, which could bring £2bn investment and create 52,000 jobs, is approved in Fantastic Budget.
The chancellor Rishi Sunak has approved a bid for a Solent freeport which includes part of the New Forest in a reduced tax and regulation zone supporters which claim could bring in £2bn of investment and 52,000 jobs to the region.
As Acorn HR Services are based in Gosport, we are pleased to hear this announcement and how it will support the local economy.
The Solent's ambitious bid for Freeport status has been confirmed by the government in the 2021 budget. This bid, led by the Solent LEP, includes both Portsmouth International Port, and also Dunsbury Park, a major business park owned by Portsmouth City Council adjacent to the A3.
What is a freeport?
A freeport is a zone designated by a government with certain allowances to boost the economy.
How will these new freeports work?
Mr Sunak said the “special economic zones with different rules to make it easier and cheaper to do business” would come with simpler planning, cheaper customs and lower taxes, with “tax breaks to encourage construction, private investment and job creation”.
Further announcements are still expected on freeports within the devolved administrations, with the manifesto committing to creating 10 in total in the UK.
Government extends business rates relief by £1.5bn to help more Covid-hit firms.
Existing business rates relief is available to those in retail, leisure and hospitality. The Federation of Small Businesses (FSB) welcomed the move. “Many of those businesses such as wholesalers, suppliers and brewers have been hit hard by the pandemic but haven’t been able to access the same levels of support,” said its national chair, Mike Cherry. However, business rates relief appeals made due to Covid-19 are now banned as well. These appeals were expected to cost up to £5bn, so the Government has saved itself £3.5bn, according to figures from the Rating Surveyors’ Association.>See also: Business rates appeal talks halted as thousands of firms wait for outcome The Government said that allowing rates appeals on material change of circumstances could have led to ‘significant amounts of taxpayer support going to businesses who have been able to operate normally throughout the pandemic’. It added this could disproportionately benefit firms in London.
Rishi Sunak also extended the Furlough Scheme until the 30 September 2021 to support businesses through this uncertain period.
April 2021 employment law changes: five things for HR to do.
1. Review your contracts for IR35 in the private sector
Reforms to the IR35 rules on off-payroll working in the private sector come into force on 6 April 2021, having been delayed by a year due to the pandemic. The rules are aimed at reducing tax avoidance for contractors employed via personal service companies.
Under the new rules, the organisation engaging the contractor is responsible for determining their employment status and assessing whether or not IR35 applies. If IR35 does apply, the organisation that pays the individual’s fees is deemed to be their employer for tax and national insurance purposes.
Once the organisation has determined an individual’s classification, it must provide a status determination statement to the individual and to the party with which the organisation has contracted. For the statement to be valid, the client must also provide reasons for the determination.
Employers should review their contracts and put in place the necessary procedures to ensure compliance.
2. Ensure workers are paid the national minimum wage
HR professionals should make sure that workers are being paid at least the national minimum wage that applies to them.
The national living wage (the highest band of the national minimum wage) increases to £8.91 per hour on 1 April 2021.
In addition, the age threshold for the national living wage is amended so that it applies to 23- and 24-year-old workers from 1 April 2021. Previously, the national living wage was available only to those aged 25 and over.
Other national minimum wage rates also increase on 1 April 2021, with hourly rates rising to £8.36 for workers aged 21 and 22, to £6.56 for workers aged 18 to 20 and to £4.62 for workers aged 16 and 17.
3. Update your organisation’s statutory redundancy pay calculations
Unfair dismissal compensation
The maximum compensatory award for unfair dismissal increases from £88,519 to £89,493 for dismissals that take place on or after 6 April 2021.
New limits on employment statutory redundancy pay come into force on 6 April 2021.
Employers that dismiss employees for redundancy must pay those with two years’ service an amount based on the employee’s weekly pay, length of service and age. The weekly pay is subject to a maximum amount. This amount is £544 from 6 April 2021.
HR professionals should ensure that calculations for statutory redundancy payments are made on the basis of this maximum amount for redundancy dismissals on or after 6 April 2021.
4. Increase statutory family-related pay and statutory sick pay
The weekly rate of statutory maternity, paternity, adoption, shared parental and parental bereavement pay increases to £151.97 from 4 April 2021.
The weekly rate of statutory sick pay increases to £96.35 from 6 April 2021.
It is up to HR to make sure that staff on maternity leave, paternity leave, adoption leave, shared parental leave, parental bereavement leave and sick leave are paid these statutory minimum rates.
HR professionals also need to review their policies and documents that mention the rates, such as their maternity policies and sickness absence procedures.
5. Report your organisation’s gender pay gap…if you can
Employers with 250 or more employees are normally required to publish their gender pay gap report by April. The deadline for private-sector and voluntary-sector employers is normally 4 April, while for public-sector employers it is 30 March.
However, the Equality and Human Rights Commission (EHRC) has stated that, due to the coronavirus pandemic, enforcement of the gender pay gap reporting duty for the 2020/2021 reporting year is delayed for six months, and does not begin until 5 October 2021.
Employers are still required to report their figures, but have an extra six months in which to do so before enforcement action begins. The EHRC still encourages employers to report their data before October 2021, where possible.
Although enforcement has been relaxed, delays in reporting may still adversely affect your organisation’s reputation not only in relation to current and future employees, but also customers and competitors.
For more detailed information click the link below:
Budget summary for Business
The Chancellor has attempted to offer ongoing help by relieving companies under pressure whilst trying to set the economy on a path to investment-led recovery. Although some of the predicted changes have been delayed or simply have not materialised, the Government seems to be offering the self-employed and business owners more support, placing them at the heart of the recovery.
Chancellor Rishi Sunak used the Budget to outline his ‘three-part plan’ towards economic recovery – supporting those still struggling, paying for the response, and investing in the future economy.
Some of the positive announcements include:
Small businesses exempt from the corporation tax hike
Any small business with profits of £50,000 or less will be exempt from the corporation tax increase to 25% from 2023 - around 70% of companies. A tapered rate will be introduced for profits above £50,000, so only businesses with profits of £250,000 or more will be taxed at the full rate.
Grant funding will be available to businesses in England through a new £5 billion Restart Grant scheme to help the high street get back on its feet. This will provide up to £18,000 for leisure and hospitality businesses and up to £6,000 for non-essential retail.
Help to Grow scheme
Over 130,000 SMEs will be supported through the new Help to Grow scheme, which will provide digital and management tools and training. Any small business can apply for a £5,000 grant to pay for Government-approved productivity software.
Self-Employment Income Support Scheme
The Self-Employment Income Support Scheme (SEISS) will? Continue with a fourth and a fifth grant. Sunak announced over 600,000 people (many of whom became self-employed in 2019-20) may now be able to claim direct cash grants under SEISS. However, self-employed company directors who pay themselves in dividends rather than PAYE were excluded from this support.
Recovery Loan Scheme
The new Recovery Loan Scheme was announced, designed to replace the existing Government-guaranteed financial support schemes that close at the end of March. The Recovery Loan Scheme is scheduled to run until 31 December 2021 (subject to review). The maximum value of a facility provided under the scheme will be £10m per business, with no turnover restriction for businesses accessing the scheme. Businesses will be able to choose from a variety of products: term loans, overdrafts, asset finance and invoice finance facilities.
Reduced VAT for hospitality
The Government has also extended the temporary 5% reduced rate of VAT in the hospitality and tourism sectors until September 30th 2021. To help these businesses successfully transition back to the standard rate, a rate of 12.5% will then apply for another six months.
There are still many challenges ahead in the road out of the pandemic, and although these measures can help, businesses need to be cautious.
Quote of the month
Don't judge each day by the harvest you reap but by the seeds that you plant.