T: 0131 341 4250|E: andrew@salonfrog.com
T: 0131 341 4250|E: andrew@salonfrog.com
139 companies around the UK, including some hair & beauty salons, are being named and shamed today for failing to pay their workers the minimum wage.
Those that were found not to have complied with the minimum wage (£4.15 an hour for apprentices and up to £8.72 for the over-25s) have been ordered to back-pay what they owe to their staff (at current pay rates), as well as all taxes due on these underpayments.
They are also being fined (up to 200% of arrears – capped at £10,000 per worker) as well as name and shamed!
This is the first time the government has named and shamed companies for failing to pay National Minimum Wage since 2018 and shows how seriously HMRC are taking the issue.
While not all breaches of minimum wage rules are intentional, it is the responsibility of all employers to ensure they are following the law.
Salons often get caught out where they pay their staff on a commission-only basis. On a quiet month the stylist’s pay can work out at less than minimum pay when you look at how many hours they’re in the salon for.
The other main causes of minimum wage breaches is around your salon’s lower-paid employees being made to cover work costs, such as paying for their own uniform, their own training or tips they receive being counted as ‘pay’ when it shouldn’t.
Sunak’s additional one-off grant announced yesterday will be open to all salons forced to close and the amount will be based on the rateable value of your salon as this:
You must apply to your local authority to get this.
This one off-grant is in addition to the existing LA grants salon owners have already received.
This new grant covers you to 3 March when Sunak will “take stock of our wider support, and set out the next stage in our economic response”.
The grant is on a per-property basis, so apply separately for each salon you have.
It applies to ALL the UK. So Scotland as well as England.
Self employed
The last line of the government press release also highlighted an extension of the Self Employment Income Support Scheme, but no further details were given on that nor any support for those that don’t qualify for SEISS.
Salonfrog joined Shine Connect in a webinar that covers what to do when a Client tries to use an expired voucher:
Full details of the third SEISS grant to support self-employed people affected by coronavirus (COVID-19) have just been published on GOV.UK.
The rules on who is eligible to claim have changed.
However, you will still need to have submitted a Self Assessment tax return for the tax year 2018 to 2019 showing self-employment income in order to claim (unless one of the existing exceptions applies).
The third grant, which offers 80% of three months’ average trading profits, paid out in a single taxable instalment capped at £7,500, will be available covering the period from 1 November 2020 to 29 January 2021. Self-employed people who are eligible and in need of support will be able to claim the third grant at any time from 30 November 2020 to 29 January 2021.
Unfortunately we cannot do this for our Clients
Like SEISS 1 and 2, we cannot claim this grant on behalf of our clients
Check you are eligible
You should check since this 3rd grant is different to the previous SEISS grants.
To make a claim for the third grant, you must meet a number of conditions, and make an honest assessment about whether you reasonably believe your trading profits will be significantly reduced due to coronavirus.
As before, to make a claim for the third grant, you must be:
i.e. Only claim if the reduction in profits is caused by reduced business activity, capacity or demand, or inability to trade due to coronavirus – reduction in profits due to increased costs (such as having to buy masks) does not count for this purpose.
Your business must have been impacted on or after 1 November 2020. You must keep evidence to show the impact and reduction in your business activity across the qualifying period.
More information
For more information and examples to help you check eligibility to claim, go to GOV.UK and search for ‘Self Employment Income Support Scheme’.
HMRC is contacting all self-employed people in the UK that may be eligible to let them know about the third grant.
There will also be a fourth grant (covering the three-month period from February 2021 to April 2021). We’ll tell you more about that nearer the time, including how much it will be and the rules for claiming.
This year has been (erm, let’s say) testing to say the least, and you might think it more important than ever to say thank you to your staff.
However, given lockdown restrictions you’re not going to be having the annual xmas party at the local bar or restaurant.
Possible alternative
HMRC has just updated its guidance, confirming that the cost of a ‘virtual’ party is an allowable expense for your salon.
“A company holds one annual function in a tax year and does so virtually using IT. All employees are invited and each is provided with a hamper consisting of some food and drink to be enjoyed by the attendees during the party. The total cost per head is £100 which is within the £150 exemption and so the exemption applies.”
In other words, spend up to £100 on each of your employees on something they can enjoy while attending a Zoom meeting. Say some words of thanks, then let them get on with it, and get the tax back!
Not just for xmas
And the rules mean that you don’t have to do this necessarily in December; you could do it anytime of the year, as long as it’s just the once per year.
Further reading
Here’s background to why you get the tax back on the Xmas parties and also on trivial benefits (an alternative idea to the xmas party):
Xmas staff party | the tax rules
Trivial Benefits | a tax efficient way to thank your staff – and you!
If you (like most salons) deferred your VAT payment between 20 March and 30 June 2020 under the coronavirus VAT scheme, you now have a new choice on how to repay it. Previously it was simply due by the end of March 2021, but now you have a second option:
If you want to opt in to the new payment scheme
This new scheme has just been announced by HMRC.
So instead of paying the full amount you owe by the end of March 2021, you can make up to 11 smaller monthly instalments, interest free.
All instalments must be paid by the end of March 2022.
To do this however, you must be up to date with your other VAT returns (having submitted and paid all other ones due).
You cannot opt in just yet – the online ‘opt in’ process will not be available until early 2021 but that’s not too far away now.
In the meantime, if you are repaying this VAT, consider using this scheme instead.
VERY IMPORTANT:
You have to opt in yourself as HMRC have said that HMRC agents (which Salonfrog is) cannot do this for you. No idea why this is.
However, when the opt in is available, we’ll see what you have to do and provide you detailed instructions.
Here’s the key points about the extended furlough scheme (CJRS):
Eligibility
From 1 November, you can add new employees who were not eligible under the scheme before November.
The earlier versions of the CJRS (which ended on 31st October) required an employee to have been employed and an RTI submission to have been made on or before 19 March 2020.
You can now include staff employed at 30 October 2020 provided an RTI submission has been made between 20 March 2020 and 30 October 2020 notifying at least one payment of earnings for that employee.
In other words, staff hired in late spring and summer are now eligible for furlough grants.
Employment agreements
Employers should remember to change the terms of employment contracts (with each staff’s agreement) before furlough starts. This is very important as HMRC has threatened to start checking this; and in fact HMRC says that only contracts signed and dated up until 13 November 2020 can be relied on for the purposes of a CJRS claim.
What can employers claim for periods starting from 1 November 2020?
Scenario 1: Employee on fixed pay
The claim is based on 80% of the usual salary/wages in a reference period.
The reference period is the last pay period ending on or before 19 March 2020 for employees who:
Scenario 2: Employee on variable pay
For an employee on variable pay, or variable hours, their ‘usual’ hours should be used.
Again, the claim is based on 80% of the usual salary/wages in a reference period.
For an employee:
Pension and NIC
You cannot claim for any pension or NIC paid by you for your employees.
How long will support remain at 80%?
CJRS has been extended to 31 March for all parts of the UK. From 1 November, the UK Government will pay 80% of employees’ usual wages for the hours not worked, up to a cap of £2,500 per month. But, the UK Government has said it will review the policy in January for claims for February and March.
Beware publicity
HMRC has said it intends to publish details of employers who use the scheme for claim periods from December 2020 onwards. It will publish the employer name and also, where relevant, the company registration number, including for LLPs.
Employees will be able to find out if their employer has claimed for them under the scheme. It has not yet been confirmed how employees will be able to obtain this information.
Deadlines
There are now shorter deadlines for submitting monthly claims. Claims for periods starting on/after 1 November must be submitted within 14 calendar days after the month they relate to, unless this falls on a weekend, in which case the deadline is the next week-day.
However, a claim once made can be increased provided it is amended within 28 calendar days of the end of the month it relates to (note that if you have over-claimed, this extension doesn’t apply).
Maximum number of employees
When CJRS V2 was introduced from 1 July 2020, the maximum number of employees which could be included in a claim was limited to the maximum number the employer had ever previously claimed for in any single claim made for periods before 30 June 2020.
For claims under CJRS V3 this limit no longer applies. This will be useful to businesses who have taken on additional staff since 1 July, who would otherwise not have been able to furlough all their staff, eg, those currently facing a new compulsory lock down of their entire business.
Some other bits to remember
Today we listened to Rishi Sunak expanding support for businesses once the existing furlough scheme ends.
Changes are:
All the detail here: