A National Insurance contributions holiday for businesses who employ armed forces veterans comes into force 6 April 2021.

The policy allows employers to claim National Insurance contributions relief for veterans they have hired during their first year of civilian employment after leaving the armed forces.

Who qualifies?

Employers will only be able to claim National Insurance contributions relief on the earnings of qualifying veterans. A person qualifies as a veteran if they have served at least one day in the regular armed forces. This includes anyone who has completed at least one day of basic training.

The relief is available to all employers of veterans regardless of when the veteran left the regular armed forces, providing they have not previously been employed in a civilian capacity.

Employments that qualify

Relief is available for any civilian employment. A civilian employment is one that is not part of the armed forces and includes employments with organisations that may have strong links to HM Armed Forces, such as the Ministry of Defence or NATO. Employment with a reserve organisation is not considered as civilian for the purpose of this relief and do not trigger the qualifying period (outlined below).

Self-employed individuals do not pay Class 1 National Insurance contributions. Therefore, self-employed businesses do not qualify for this relief. In addition, self-employed work does not trigger the qualifying period.

Limits on the relief

Relief will apply on earnings up to the upper secondary threshold. If a veteran’s earnings are above the threshold, employers can apply the relief on the part of the earnings below the threshold. This approach is in line with existing reliefs for under 21s and under 25s apprentices.

On 12 April, the rules that government has required us to follow to combat COVID-19, changed. From that date:

• non-essential retail will be able to reopen
• personal care premises such as hairdressers and nail salons will be able to reopen
• public buildings such as libraries and community centres will be able to reopen
• outdoor hospitality venues will be able to reopen, with table service only
• most outdoor attractions including zoos, theme parks, and drive-in performances (such as cinemas and concerts) will be able to reopen
• some smaller outdoor events such as fetes, literary fairs, and fairgrounds will be able to take place
• indoor leisure and sports facilities will be able to reopen for individual exercise, or exercise with your household or support bubble
• all childcare and supervised activities will be allowed indoors (as well as outdoors) for all children. Parent and child groups can take place indoors (as well as outdoors) for up to 15 people (children under 5 will not be counted in this number)
• weddings, civil partnership ceremonies, wakes and other commemorative events will be able to take place for up to 15 people (anyone working is not included in this limit), including in indoor venues that are permitted to open or where an exemption applies. Wedding receptions can also take place for up to 15 people, but must take place outdoors, not including private gardens
• self-contained accommodation will be able to open for overnight stays in England with your household or support bubble
• you should continue to minimise the amount that you travel where possible
• care home residents will be able to nominate two named individuals for regular indoor visits (following a rapid lateral flow test)

If progress continues, as evidenced by falling infection rates, further easing of lockdown will occur in the following three months.

1 April 2021 – Due date for Corporation Tax due for the year ended 30 June 2020.

19 April 2021 – PAYE and NIC deductions due for month ended 5 April 2021. (If you pay your tax electronically the due date is 22 April 2021)

19 April 2021 – Filing deadline for the CIS300 monthly return for the month ended 5 April 2021.

19 April 2021 – CIS tax deducted for the month ended 5 April 2021 is payable by today.

30 April 2021 – 2019-20 tax returns filed after this date will be subject to an additional £10 per day late filing penalty.

1 May 2021 – Due date for Corporation Tax due for the year ended 30 July 2020.

19 May 2021 – PAYE and NIC deductions due for month ended 5 May 2021. (If you pay your tax electronically the due date is 22 May 2021).

19 May 2021 – Filing deadline for the CIS300 monthly return for the month ended 5 May 2021.

19 May 2021 – CIS tax deducted for the month ended 5 May 2021 is payable by today.

31 May 2021 – Ensure all employees have been given their P60s for the 2020-21 tax year.

The new tax year starts 6 April 2021, and without dwelling too much on the historical trickery that has landed us with this odd commencement date, what are the challenges we will need to grapple with in the coming year?

Keeping clear of COVID

Pretty obvious really, no-one would willingly risk a dose of COVID-19 and its variants. Unfortunately, to achieve this, we will likely need to abide by government restrictions for most if not all of 2021-22.

Coping with lockdown

Even if lockdown ceases to have its current impact, particularly on the leisure, entertainment and hospitality trades, it is unlikely that we will be free of social distancing rules and regulations for some time.

Those trades adversely affected by this disruption will need to plan accordingly.

Working from home

Many jobs are now being advertised with two or three days a week working from home rather than the office. Which means:

• Employers will need to rethink their human resource services to support staff achieving the same levels of productivity when working away from their employers’ office.
• Employees will need to achieve a new relationship with work when working from home; be firm in setting the boundaries.
• Does this change offer an opportunity to reduce office space (and overheads) by desk-sharing?

Retaining profits and reserves

Financially, business owners will need to keep an eye on the following indicators if they are to keep heads above water:

• Apart from any capital introduced by business owners, the major source of value in most businesses is profits retained in the business after all taxes have been paid. In the last year, many firms will have used any opening reserves to fund losses during the worst periods of lockdown.
• As a result of the above it is possible that businesses have either reduced or exhausted cash reserves and had to borrow – most using the government-backed loan schemes – to maintain liquidity.

Which means…

Planning is vital.

If you have not yet created an integrated budget for 2021-22, now would be a good time to make a start.

• Will you encounter any cashflow challenges?
• If yes, how will you plug these cashflow gaps. Do you need to approach your bank now?
• How difficult will it be to re-establish and maintain profitability?
• Are you under or over-staffed?
• Has Brexit affected your supply lines?

Until you sit down and work through your options you are vulnerable. And if the past year has taught us anything, its that we can no longer take anything for granted. We must expect the unexpected.

We can help

Please call if you need help with this planning process. And don’t delay. There is no point in closing the proverbial stable door once your busines recovery options have left the stable.

Employers who have employees paid at the National Living Wage (NLW) or National Minimum Wage (NMW) rates should be applying new rates of pay from 1 April 2021.

In full, the increases from April 1, 2021 are:

• NLW (23 ) has increased 2.2%, from £8.72 to £8.91
• NMW (21-22) has increased 2%, from £8.20 to £8.36
• NMW (18-20) has increased 1.7% from £6.45 to £6.56
• NMW (under 18) has increased 1.5% from £4.55 to £4.62
• Apprentice Rate has increased 3.6% from £4.15 to £4.30

In effect these changes mean that the 23-24 age category for the National Minimum Wage has been abolished, following the lowering of the age of the eligibility for the National Living Wage to 23 years old.

Employers should be aware that there are severe penalties if you fail to pay these NLW and NMW rates.

Currently penalties are:

• Any arrears of pay need to be repaid to employees.
• Penalties of up to 200% of arrears owed to employees may be charged.
• Maximum fines are presently set at £20,000 for each affected worker.

Obviously, it pays to be compliant…

The government has confirmed its intention that furloughed employees will be paid 80% of their wages for hours not worked under the furlough scheme.

Up to 30 June 2021, this payment will be fully-funded by government and capped at £2,500 per month.

From 1 July 2021, employers are required to contribute 10% of the 80% (capped at £312.50 per month) government contributing 70% of the 80% (capped at £2,187.50 per month).

From 1 August 2021, until the scheme is due to end 30 September 2021, employer contributions rise to 20% of the 80% (capped at £625 per month) government contributing 60% of the 80% (capped at £1,875 per month).

Readers are reminded that one of the conditions to apply for this support is that you can demonstrate that your business continues to be adversely affected by COVID disruption.

Throughout this period, employers are fully responsible for payment of any hours worked.

Since 15 March 2021, smaller businesses can apply for grants of up to £2,000 to help them adapt to new customs and tax rules when trading with the EU.

The £20 million SME Brexit Support Fund enables traders to access practical support, including training for new customs, rules of origin and VAT processes.

Small and medium sized businesses that trade solely with the EU – and are therefore new to importing and exporting processes – are encouraged to apply for the grants.

The fund, announced in February by the Chancellor of the Duchy of Lancaster, Michael Gove, is the latest round of government support for UK trade.

To be eligible, businesses must import or export goods between Great Britain and the EU or move goods between Great Britain and Northern Ireland.

This follows the government setting out a new timetable for introducing import border control processes to enable UK businesses to focus on their recovery. Full import border control processes will now be introduced on 1 January 2022, six months later than originally planned.