Four need-to-know HR and payroll changes that will affect your UK business
Dealing with the impacts of COVID-19 has been the core focus of almost all businesses over the past month or so. All eyes have been on the UK government’s measures to bring much-needed support to those affected, priorities have shifted, and teams are taking things day-by-day.
It’s far from business as usual, which is why it’s understandable if a few key dates and details have slipped through the cracks when it comes to managing your payroll and staying on top of the latest legislative changes.
We wanted to make sure you’re in the know, which is why we’ve put together some highlights on what’s been happening in the world of HR and payroll this month.
1. IR35 reforms have been postponed to 2021
As part of the UK government’s economic response to the coronavirus crisis, the off-payroll reform, or IR35, has been officially postponed to 6 April 2021.
If your business had initiated or completed the transition towards the IR35 changes, you may want to consider rolling back to your previous work arrangements if it suits. It is recommended that you document all the relevant details you’ll need to resume the process as the new rollout date approaches. The government has also provided some helpful resources to help you communicate with contract workers about these changes.
If you have not taken steps to implement this change, you should be aware that the HM Revenue and Customs (HMRC) remains committed to the rollout, and you can use this time to kick start the process. Check out our handy guide to IR35 for all the details.
2. Coronavirus Job Retention Scheme (CJRS) payments
The CJRS will be open from 20 April 2020, with the first payments expected to begin from 30 April.
The scheme was introduced by the UK government to provide businesses with financial support and help them continue paying employees’ salaries. Under this scheme, businesses can claim 80% of employees’ salaries up to a maximum of £2,500 a month. The scheme will initially run for three months but may be extended.
Businesses eligible for CJRS are those which have started a Pay As You Earn (PAYE) payroll scheme on or before 28 February 2020, have enrolled for PAYE online and have a valid UK bank account.
Employees who have been placed on unpaid leave, or furloughed, for at least three consecutive weeks are eligible to be covered by the CJRS. These employees, who can either be a UK or foreign national, must have been on the business’s PAYE payroll on 28 February 2020. Check the government website for more details on claiming CJRS payments.
The claims process will take place online via a HMRC portal which will be open from 20 April.
3. Increases in Statutory Sick Pay (SSP)
In an additional measure to support businesses and employees during COVID-19, the HMRC has announced an increase in Statutory Sick Pay (SSP) for employees earning a minimum average of £120 per week, who have been self-isolating due to COVID-19 since 13 March 2020. This increase starts from 6 April 2020, increasing SSP from £94.25 per week to £95.85 per week.
Employees who were self-isolating before 13 March 2020 due to coronavirus symptoms can receive SSP from the fourth day of their isolation. However, employees who were in self-isolation before 13 March 2020 because someone in their household had symptoms, do not qualify for SSP. Otherwise, the usual rules around SSP eligibility apply.
4. Increases in minimum wage and national living wage
Starting 1 April 2020, there was an increase in the national living wage (NLW) and the national minimum wage (NMW). The rate increases are:
- Employees aged 25 and above: Increase of 6.2% from £8.21 to £8.72 per hour
- Employees aged 21 to 24: Increase of 6.5% from £7.70 to £8.20 per hour
- Employees aged 18 to 20: Increase of 4.9% from £6.15 to £6.45 per hour
- Employees aged under 18: Increase of 4.6% from £4.35 to £4.55 per hour
- Apprentices: Increase of 6.4% from £3.90 to £4.15 per hour
These rates are updated yearly in April, and you can use this calculator to check if you’re paying your employees the correct minimum wage rates or owe them any payments from the previous year.