What is IR35 and what does it mean for you?

What is IR35 and what does it mean for you?

ir35

Article originally posted here, written by Nick Green, financial journalist. 

What is IR35 and how can you avoid being caught out by it? We explain what this controversial tax change means for contractors and the businesses that hire them, and how to take steps to reduce the risk of being sunk by the IR35 trap. 

Small businesses and freelancers alike have been bracing themselves for an imminent change in a piece of tax-avoidance legislation. This has been pushed back thanks to the coronavirus, but it still means that from April 2021 private sector employers will have to follow the same rules as the public sector with regard to IR35. The Federation of Small Businesses has warned that both companies and contractors will feel the pinch. 

What is IR35? 
IR35 is also known as the ‘off-payroll working rules’. IR35 is designed to prevent workers from avoiding tax by operating as contractors, when really they are employees in all but name. So for example, if a contractor operates via their own limited company, but is otherwise treated the same as their client’s employees, they are considered to be ‘inside IR35’ and will need to make additional tax payments. 

What is the new change concerning IR35?
IR35 was originally introduced by Gordon Brown, to prevent employees from avoiding tax by being treated as contractors. However, since then the legislation has become notorious, sometimes implicating businesses that believed they were hiring contractors appropriately, only for HMRC to disagree. 

Post-April 2021, private sector employers will be held responsible for determining whether IR35 applies to any contractor they hire – which would require them to treat the contractor as an employee for tax purposes. This is already the case in the public sector. 

Private sector businesses will therefore face a tricky choice: continue to treat contractors as contractors and risk a hefty fine if HMRC takes a different view – or treat them as employees with the additional costs and responsibilities this involves. There is widespread concern that genuine contractors will be classed as employees, and so will either take an unfair tax hit, or lose their contracts altogether. 

Are you inside or outside IR35? 
IR35 was introduced because of the way employees are treated differently from contractors. With an employee, an employer must provide a workplace pension, paid holiday, sick pay, other benefits (perhaps) and pay employer’s National Insurance contributions. A contractor, on the other hand, is paid a flat fee and can be dismissed easily if there is no more work for them to do. 

The vast majority of contractors operate as limited companies, either one-person companies or ‘umbrella’ companies. It’s rare for contractors to be sole traders, as unlimited liability make this risky for them, while companies are wary of hiring them in case HMRC thinks they are employees. Operating as a company also means the contractor can pay less tax. 

However, operating as a company doesn’t prevent a contractor from being an employee in all but name – which is where IR35 comes in. Broadly, IR35 says, ‘If it looks like a duck and quacks like a duck, it’s a duck.’ In other words, if the contractor is working like an employee, with similar obligations, then they should be treated as one for tax purposes. HMRC therefore looks very closely at what it calls ‘personal service companies’. 

What’s a personal service company? 
Though the name may sound dubious, a personal service company (PSC) is merely a company through which a contractor operates in order to do their freelance work (because most businesses won’t hire a sole trader). The term isn’t defined in law – HMRC simply uses this label to describe companies that may be used as ‘cover’ by contractors who are really employees in all but name. 

This creates a double problem, affecting both contractors and the businesses that want to use them. If a business is afraid that any contractor it hires might be considered an employee by HMRC, it may not risk hiring them at all. In this case, both the business and the contractor lose out. This is what many small business fear will happen post-April 2021. 

Can I check my IR35 employment status? 
HMRC offers an online tool, Check Employment Status for Tax (CEST) that you can use to give yourself a general guide to your status. However, industry bodies (including IPSE, the Association of Independent Professionals and the Self-Employed) fear it is still not fit for purpose. Contractors, recruitment agencies and end-clients therefore shouldn’t rely on it wholly when determining IR35 status. 

The biggest problem with CEST: the MoO factor 
One of the key deficiencies of the CEST tool is that it does not factor in ‘Mutuality of Obligation’ (MoO). Mutuality of Obligation is one of the defining characteristics of employment, in that the employee has certain obligations towards the employer, and vice versa. Many of these obligations do not apply to contractors (e.g. the contractor can choose where and how to deliver the work, and can delegate it to an associate if necessary; while the client is not obliged to offer the contractor more work). MoO has been a decisive factor in a number of recent IR35 tribunals, which is another reason why the CEST tool is still only a rough guide. 

8 tips on how contractors and businesses can avoid IR35 

Fears that the changes to IR35 will spell the death of freelancing are exaggerated. By taking the appropriate steps, both contractors and businesses can ensure that they do not fall foul of IR35. 

Remember, IR35 is something that applies to a role, rather than an individual. So just because you were outside it on your last assignment, doesn’t mean that you won’t be inside it on your next one. For every assignment that you take on as a contractor, the most important thing is to be able to show that you are ‘in business on your own account’ and therefore not an employee. 

Tips for proving you are ‘in business on your own account’ 

If you are a contractor operating through a limited company (either your own or an umbrella company), HMRC may ask for evidence that you are genuinely freelance, and not just an employee of your client. Here are some ways that you could make your case. 

1. Highlight the ways your work situation differs from employees’ 

Genuine employees will have certain set working conditions, such as minimum hours, pension arrangements and other benefits, and perhaps subsidised services too. The employer also has a duty to provide work for them, which the employee has an obligation to do – and the employer can stipulate where and how the work is to be carried out. You should be able to show that little if any of this applies to you. 

2. Keep client correspondence 

If you have emails that clearly state you are not under the control of a manager at the business, but are simply contracted to provide a service, this can be useful too. 

3. Don’t name your company after yourself 

HMRC knows that a company named after a person may well be just that person, and this fits their profile of a PSC. But if your company has a more ‘business-like’ name, e.g. XYZ Design, it emphasises the fact that your company is distinct from you, and that you could delegate the work to another person if necessary. Employees cannot delegate in this way, so it marks you out as different. 

4. Have your own marketing materials 

You should be able to demonstrate that you market your contracting services actively. Have a listing on relevant services website, post adverts and print business cards, all of which help to indicate that you are in business on your own account. Never use a business card which includes your client’s branding! 

5. Maintain your own office 

A well-equipped office, even just in your own home, will strongly imply that your work activities extend well beyond your current client. If you also invest in your own software licences, trade literature and professional memberships, this can help a great deal too. 

6. Take out your own business insurance 

Having your own business insurance, such as professional indemnity insurance, is a great way of demonstrating that you’re not just an employee. 

7. Invest in your professional development 

Employees don’t pay for their own training, so if you pay for yours this will be another useful point of difference. Some professions may require you to take continued professional development (CPD) to remain qualified, so by paying for this you’re also reasserting your contractor status. 

8. Try to have multiple clients at the same time 

It’s not always possible to arrange, but if your time is split fairly evenly between two or more main clients, it’s much harder for HMRC to claim you’re an employee of any of them. However, having a very uneven split (e.g. 90 per cent of your income deriving from one client) may be less convincing. 

The more of these strands of evidence you can call upon, the more likely it is that HMRC will accept you are in business on your own account. Having just one or two on their own may not be enough. 

IR35 tips for businesses hiring contractors 

If your business hires contractors, either from time to time or on an ongoing basis, then you should review your relationships with them to ensure they don’t fall inside IR35. 

From April 2021 it will be your responsibility to determine whether a worker is an employee or a contractor for tax purposes. You will have to issue a Status Determination Statement to your contractors, which makes their IR35 status clear (inside or outside the rules) and explains why. As long as you support your decision with sufficient evidence and file the appropriate tax documents, you should avoid any penalties. 

In summary, you should: 

  1. Review all your relationships with contractors and/or consultants 
  1. Make sure your terms of engagement are clear and accurate 
  1. Provide contractors with their Status Determination Statement 
  1. Consider changing some contractors into employees if they fall within IR35 and if this is a more practical solution for you both 

Will I have to give my contractors employment rights? 

Some contractors who fall within IR35 and are treated as employees for tax purposes may feel they are entitled to full employment status, with all the protections that go with it. There are many potential issues that can arise from this, such as claims for backdated holiday pay, which will have to be addressed on a case-by-case basis. 

Ask your accountant to help you face up to IR35 with confidence. 

 

What’s new in social media?

What’s new in social media?

Social Media

With social media constantly evolving we look at some of the latest updates to some of the most commonly used social media platforms.

Facebook introduces the rollout of Facebook Reels

Earlier this month, Facebook announced that it will begin the rollout of Facebook Reels in the U.S. Select Facebook users are now able to create Reels within the Facebook app (on both iOS and Android), and share them to Facebook Groups and their News Feeds.  Facebook Reels, which will give Facebook users the ability to create and share short-form video content directly within the News Feed or within Facebook Groups.

Find out more: https://techcrunch.com/2021/08/19/in-growing-battle-with-tiktok-facebook-to-test-facebook-reels-in-the-u-s/?utm_content=bufferdbe92&utm_medium=social&utm_source=twitter&utm_campaign=buffer

 

Facebook and Instagram face criticism for Covid misinformation

Social media companies came under fire after a report by the non-profit Center for Countering Digital Hate (CCDH) revealed that a group dubbed the “disinformation dozen” are responsible for 65% of online anti-vaccine content.

https://blog.hootsuite.com/social-media-updates/facebook/instagram-facebook-criticized-for-covid-misinformation/

 

Instagram Reels can now be 60 seconds long! (hurrah)

In response to community feedback, Instagram will now allow Reels to be up to one minute in length. Reels first launched with a 15-second time limit in August 2020, and was doubled to 30 seconds a month later. https://blog.hootsuite.com/social-media-updates/instagram/reels-up-to-60-seconds-long/

 

TikTok has announced new partnerships with both Vimeo and Canva to provide more ways for marketers to build better campaign creative in each respective app.

The new integrations will facilitate direct connection between TikTok Ad Manager and each platform, making it easy to build TikTok creative, and upload it straight into your campaign. The creative options also align with key TikTok dimensions and creative flows, ensuring that your clips feel natural and in line with the rest of the platform – and not too polished and ad-like, which is a key consideration in your TikTok marketing approach.

https://www.socialmediatoday.com/news/tiktok-announces-new-partnerships-with-vimeo-and-canva-to-streamline-conten/605080/

 

We also thought you may find interesting, recent marketing statistics from the social media examiner industry report

  • Instagram is hot: Seventy-eight percent of marketers are using Instagram. It’s the second most important social platform for marketing (behind Facebook). A significant 64% of marketers plan on increasing their Instagram organic activities over the next 12 months. Instagram is the number-one platform marketers want to learn more about.
  • Stories video use is on the rise: Short-form video is growing. More than half of all marketers regularly use Instagram and Facebook for video-based stories.
  • YouTube interest is high: A significant 71% of marketers plan on increasing their use of YouTube video and 72% want to learn more about organic video marketing on the platform.
  • TikTok is ignored by most marketers: Only 9% of marketers are using TikTok. A significant 68% do not plan on using the platform in the next year; however, 32% are interested in learning more about TikTok.
  • Facebook dominance still strong: A very significant 93% of marketers use Facebook (followed by Instagram at 78%). Fifty-four percent of marketers claim Facebook is their most important social platform. Facebook Live is the leading live video platform used by 30% of marketers. Facebook ads are used by 75% of marketers and 61% find the Facebook ads platform the most important for ads.

 

Their research also shows a significant 64% of marketers plan on increasing their Instagram organic activities over the next 12 months, making it the top platform where marketers plan on doing more.

You can download the full report here:

https://www.socialmediaexaminer.com/report/

If you want to find out more about using social media to raise your brand awareness and drive sales, contact designated’s marketing director Michelle who would be happy to tell you all about our fab team: michelle.wheeler@designated.com

Virtual business support and what it means for sustainability

Virtual business support and what it means for sustainability

Virtual Business Support Sustainability

Virtual Business Support and What it Means for Sustainability. 

The term work-life balance took a complete turn during the height of the pandemic. While many missed the mid-morning coffee machine banter, others thrived by spending more time with their families, had time to focus on their mental and physical well-being and some even uprooted their lives completely, re-locating to areas they would actually like to live with no lengthy commutes to consider. Saving a small fortune in the process.

For the employee, remote working or even a hybrid model is an easy sell. Fortunately, most employers have been willing to look at the future of work for their business.

The benefits of remote working for employers include:

  • On-premise cost savings
  • Productivity of workers
  • Mental health and wellness of employees
  • Expansion of talent pools
  • Communication improvement

But that’s not all. One of the most beneficial and impactful arguments for remote or hybrid working models, sits with sustainability.

The UN believes 14 of its 17 Sustainable Development Goals can be solved or advanced through virtual work. Living and working sustainably is more than just good business.

In the world today we are facing several threatening global issues, a health pandemic, economic crisis, climate change, mental health emergency and not to mention the entanglement of race and inequality. Though remote working won’t eradicate these issues entirely, virtual jobs have the power to change the lives of employees, businesses, and communities across the globe by impacting:

  • The Economy: When employees are spread across countries rather than packed into cities and hotspots, wealth can spread and help to uplift poorer communities.
  • The Environment: Working remotely means shorter commutes, lighter carbon footprints, reduced air pollution, carbon emissions but it also has a knock-on effect on things like food production, energy usage, elimination of physical office waste like stationary with cloud technology. Fast fashion which is a topic currently discussed a lot will be impacted, employees won’t have the need to purchase as many clothes.
  • Diversity: Equal remote work earns equal opportunity.  It turns out that when managers are focused on the what of results, suddenly the whowhen, and where doesn’t matter as much. Consequently, traditional discriminatory factors like race, age, gender, and family status are reduced or eliminated in virtual workplaces.

Here at Designated, we saw the benefits of remote working long before COVID-19 made it almost mandatory for businesses to adapt to using virtual and cloud technologies.

Managing Director Jane Braithwaite has been able to build Designated with an unlimited pool of talent, sourcing industry experts across PA, Accountancy, Marketing, HR & Recruitment both locally and globally to the benefit of all Designated’s clients. There is no traditional 9-5, no distractions, lengthy meetings and no burnout or stress from commuting. The work is done quickly and efficiently using the best virtual business support teams available.

Remote business support allows business leaders to focus their time on what matters. With flexible support options available you can choose to hire a virtual PA, virtual marketing team or a virtual accountant when, and how you need it.

For more information about virtual business support contact Michelle Elliot on michelle.elliott@designatedgroup.com

 

 

 

How to prevent burnout as you return to work

How to prevent burnout as you return to work

Designated Group Burnout

 
Burnout is defined as physical or mental collapse caused by overwork or stress. As it turns out, there are ways to identify the early warning signs of burnout. And, there are many simple practices you can put in place immediately to prevent burnout from becoming an occupational hazard .
 

13 Early Signs of Burnout 

  1. High levels of stress or anxiety. Feeling frequently on edge, with adrenaline constantly coursing through your body.

     

  2. Lack of engagement. You don’t feel motivated at work. You have difficulty focusing or exhibit a short attention span.

     

  3. Increased cynicism. Feelings of resentment or disconnection. You may notice yourself being more negative and cynical. Feeling cranky and defensive or snapping at people easily. Youdon’tmake time to talk on the phone or connect with the people who matter most to you. If you’re feeling a lot of resentment towards others, chances are it’s because you’re not getting your needs met and you’re on the path to burnout.

     

  4. Distracted eating. You eat your meals in front of a computer, television or while on the go (in the car, standing up, etc.)

     

  5. Not getting enough sleep. The suggested minimum amount of sleep is seven to eight hours each night, if you’re getting less than this, you risk some level of burnout.

     

  6. Low energy and exhaustion. You’re tired. Not just sleepy tired, but emotionally fatigued. You may feel exhausted by the end of the day, with no energy left to exercise or even engage with others, you just want to crash and watch television or zone out in some other way.

     

  7. Never enough time. You feel as though you’re always in a hurry and never have enough time for all the things you’re trying to accomplish each day.

     

  8. Excessive worrying, high level of self-criticism. Your mind cycles through the same worry-filled thoughts again and again and you can’t seem to stop. The critical voice in your head is very loud, telling you constantly to do more, work harder, and no matter what you accomplish, you’re still not doing enough. There is no self-compassionate voice to balance out the critical voice, or if there is, it is very weak and you can barely hear it.

     

  9. Physical illness. Initially, the physical symptoms can be subtle. You may experience headaches, a persistent cold, have a stomach bug or an upset stomach frequently, or a weak immune system in general. If early signs are ignored, your body may hit a wall and receive a more serious diagnosis.

     

  10. Numb feelings. Increase in addictive behaviour. Initially, this can show up as an excessive dependence on caffeine and/or sugar to stay alert and boost energy when feeling low. As things progress, increased dependence on drugs, alcohol, eating comfort foods or watching more television than usual can be signs you are burning out and using these coping mechanisms to avoid acknowledging how you really feel.

     

  11. Inefficacy. Experiencing diminished personal accomplishment, a perceived decline of incompetence or productivity, and expending energy at work without seeing any results.

     

  12. No Breaks.

– Vacation. You can’t remember the last time you took a single day off just to relax and do nothing. Or perhaps you haven’t had a vacation in over six or even twelve months. 

– Recharge throughout the day. You may have a tendency to push through your work without taking a break. It’s one thing to be in the zone, but if you notice you’re not getting up to get a glass of water, stretch your legs, go on a walk or call a friend at least once every 90-120 minutes, you could be putting unnecessary stress on your body. 

– Weekly Rituals. You haven’t made time for a rejuvenating activity in the last week (massage or any pampering treatment, a bath, cooking or reading a book simply for pleasure, going on a hike, etc.). 

  1. Not enough exercise. You aren’t making as much time to exercise or move your body as you would like. 

What are some practical, simple & cost-free things to do? 

First, go through the list above and circle your top three symptoms. 

Next, ask yourself “Hmmm, what do I need?” for each of these areas. For example, if you’re eating at your desk five days a week, what you need could be to connect with friends or colleagues over lunch more often, or to exercise during your lunch break. If you haven’t taken a vacation in over a year, what you need could be to schedule a vacation. 

Once you determine what you need, come up with an action step for each of these three areas. An action step has a “What” and a “By When.” For example, Action Step: I will plan a vacation and book the tickets by next Thursday at 4pm. 

Setting concrete goals is one of the best ways to ensure you’ll make a change. 

Avoiding burnout starts by putting some of these preventative measures in place. 

If you want even more accountability, you can recruit an anti-burnout partner. Tell this person what your action steps are and ask him or her to hold you accountable by checking in to make sure you’ve followed through. 

Getting support and setting clear action steps will help you implement these simple practices with greater ease. 

Hire a Designated Virtual Personal Assistant and delegate some tasks to ease the burden.  Our virtual personal assistant team will work with you towards the same goal and help to ease the pressure. 

 

Nurture your staffs mental health

Nurture your staffs mental health

Mental Health

From the start of the Covid pandemic, we have been very aware of concerns relating to mental health and the increased number of people suffering from mental health problems.

This has largely been due to lockdown and the impact that has had, and we have heard how it has affected everybody, both young and old.

It is important that we gain the best understanding so that as leaders, managers and role models, we can help and support our people – and to know what support is available for those who need it.

Before Covid, we knew mental health-related issues were the most common cause of long-term sickness in UK workplaces.

Surveys performed by the Chart­ered Institute of Personnel and Develop­ment (CIPD) in 2019 reported that the impact of stress, in particular, had increased, with 37% of respondents saying that stress-related absence had increased in the last year. They concluded: ‘Work-related stress, depression or anxiety accounts for 44% of work-related ill health and 54% of working days lost in 2018-19.’

As well as sickness absence, poor mental health at work can lead to increased staff turnover, reduced engagement and high absenteeism.

Mental health problems affect around one in four people in the UK in any given year.

As we recover from Covid, there is much evidence to suggest that the pandemic and measures taken to manage it, such as lockdown and social distancing, will have a significant impact upon the mental health of employees and the impact may be felt for months or even years.

How will Covid-19 affect our mental health?
We do not yet know what the exact impacts of the pandemic on our mental health will be. People have been affected in different ways: many feeling isolated, others are fearful about catching the virus themselves and also anxious about their family and friends.

Employees in healthcare have been working long hours with few rest periods in very difficult circumstances throughout the pandemic and have possibly not had the time or opportunity to reflect on their own well-being.

This long-term stress has taken a toll and continues to do so. Our best defence against mental health is resilience, but, to maintain resilience, individuals need time to recuperate.

Lockdown’s impact
Mind, the mental health charity, reported that over half of adults and over two-thirds of young people said their mental health declined during lockdown. Young people and those with pre-existing mental health conditions were particularly affected.

The health impacts of lockdown include findings of fatigue, musculoskeletal conditions, poor work-life balance, reduced exercise and increased alcohol consumption. In relation to workplace mental health specifically, employees were reporting reduced motivation, loss of purpose, anxiety and isolation.

Evidence from previous quarantine situations also suggest that there are long-lasting effects on mental health.

Working from home
Many people have been working from home during the pandemic and while most have found this to be more productive, still one-in-three people have found the opposite, according to research by MetLife UK.

Almost one-in-three (32%) workers admit that their productivity has declined as a result of the shift to home working. Of these employees, two in five (41%) believe that their mental well-being has impacted their productivity levels. The impact is understood to have been more apparent for younger groups aged below 30 and also older women aged 50 plus.

There is also a marked difference between the statistics reported by employees and those reported by employers. Employers believe there has been a greater decline in productivity, with 56% of employers reporting that they perceive their employees’ personal well-being has impacted their productivity levels. This is significantly higher than the 32% of workers who reported their productivity has declined.

Productivity is absolutely key in any business, and therefore it follows that we should be concerned about our employees’ mental health and how this affects the productivity of our teams.

We need to do our best to understand the issues that our teams are facing and support them by implementing management strategies to reduce the impact in the workplace.

Understanding the issue
As mentioned previously, there seems to be a huge amount of information stating the enormity of the mental health problem caused by Covid, but there does not appear to be much research yet giving us useful data to understand the specifics of the issues and indeed how to address them.

One of the greatest challenges is that individuals are often unlikely to ask for help when they need it.

As managers and leaders, we need to work hard to encourage openness and make it easier and more comfortable for people to ask for help.

HR management
Large companies will have in-house HR departments providing expert support and who will be defining organisational strategies to help their managers and leaders deal with mental health issues in the workplace.

For smaller organisations, there is less support available and managers will need to address these issues themselves.

In an attempt to provide a useful guide, our HR managers have provided some input that I hope will be of value.

What is workplace mental health?
Mental health, like physical health, fluctuates over time and there are degrees of severity. Symptoms include struggling with low mood, anxiety and stress, and we know stress can contribute to other illnesses.

Conditions include depression, anxiety, phobias and bipolar, which tend to continue over a prolonged period.

As employers, one of our objectives should be to help individuals feel comfortable in talking about how they feel. In doing so, we must avoid attempting to diagnose and instead focus on discussing how the issues impact the employee’s work and their work-life with a view to agreeing on a plan to provide additional support.

A range of measures will need to be introduced and a good starting point for any manager developing their strategy is to understand our legal responsibilities as an employer.

Legal duties
These legal duties set the minimum requirements and must be adhered to, but there is a wealth of evidence arguing that employers who go above and beyond will benefit from improvements in employee engagement, reduced absence, reduction in staff turnover and improved organisational culture.

Employers have a duty to protect the health, safety and welfare of their employees, including mental health and well-being.

The UK Health and Safety Executive defines work-related stress as a reaction to excessive pressure or another type of demand placed on an individual at work. It is the employer’s duty to assess the risk of stress-related mental health issues arising from work and to take measures to control the risk.

Employees who have a mental health condition may be disabled and will therefore be protected from discrimination during employment as defined by the Equality Act 2010.

Employers are required to make reasonable adjustments for employees with disabilities, which may include amendments to working hours, location of work, changes to duties and the provision of additional equipment.

Prevention is always better than cure, but obviously, in the case of mental health issues, prevention is not necessarily within the employer’s control; however, there are early actions that can be taken.

Supporting the mental health of employees, is vital and it is warranted to take a pro-active approach.

Preventative measures largely relate to improving organisational culture by increased communication so that mental health issues can be more easily addressed and supporting managers by ensuring they are well informed, as they will play a pivotal role in the handling of any issues. (See box below).

Providing support
Managers need to know the typical signs and symptoms of poor or declining mental health exhibited in the working environment.

These can include the following:

  • Workaholic tendencies: Working long hours without breaks;
  • Increased absence due to sickness;
  • Any uncharacteristic behaviour: Emotional responses to situations which could include tearfulness or anger;
  • Withdrawing from others on the team.

Any of these behaviours in isolation clearly do not imply that an individual has a mental health issue, but they do provide an opportunity for a manager to discuss well-being with an individual, which could prove to be valuable in preventing a potential issue.

When a manager holds a one-to-one discussion with an individual, it is important they do not jump to any conclusions. Ideally, the conversation will start with an open discussion about how the employee is feeling, although we know that people are often reluctant to talk openly.

Within an organisation where mental health and well-being are discussed regularly, hopefully, the employee will feel more able to be open and honest.

When an individual asks for help, it is important that help and support is made available in a timely manner.

In a large organisation, the HR department may become involved to provide support and potentially the occupational health team, if needed.

In a smaller organisation, it may be relevant to seek advice from outside organisations and there are many suitable providers.

Throughout any discussion of this nature, the manager must be non-judgemental. It is very clear that all people managers have a serious responsibility in their employees’ well-being, and they will also need to be supported and guided through this process.

Support available
The Chartered Institute of Person­nel Directors provides a wealth of information on its website and it is a valuable resource for all managers dealing with HR issues.

Over the coming months, we will have access to much more data regarding the long-term impacts of the Covid-19 pandemic. As leaders, we will need to learn and evolve to ensure we provide the best support possible so that we can continue to lead successful, high-performing companies and teams.

If you would like any further information in relation to this article, please do get in touch. I am always very happy to help and I am sure that my team of HR professionals will also be able to help with most workplace well-being questions.

Furlough going forward, what you have to pay from July 1st, 2021.

Furlough going forward, what you have to pay from July 1st, 2021.

Furlough Scheme July 1st

Furlough has been somewhat of a saving grace to both employers and employees since the beginning of the pandemic. Now as coronavirus cases begin to ease, with the help of the nationwide vaccination programme, the UK government has announced changes to the scheme which come into effect July 1st, 2021, with subsequent changes also from August 1st, 2021.

The current scheme: The Furlough funds that are currently available to businesses in the UK allow for a grant of up to 80% to cover an employees pay, up to a maximum of £2,500 per month. Employers can choose to top up to 100% if they wish.

Flexible Furlough is also an option. An employee will work only some hours, which their employer will pay them for in full, the grant will cover 80% of pay for the employees unworked hours subject to a cap of £2,500.

What will change for employers as of 1st July 2021?
From the 1st of July 2021, the Government’s grant will reduce to pay 70% of a Furloughed employees wages instead of 80%. However, monthly pay for Furloughed staff must remain at 80%, (at a cap of £2,500) so employers must contribute 10%, up to £312.50 each month.

What will change for employers as of 1st August 2021? From 1 August 2021 until the scheme ends, the Government’s grant will reduce a final time to 60% of Furloughed employees’ wages for their unworked hours (capped at £1,875 per month).

With the 80% pay still required for employees, the employer’s contributions will increase to 20% (up to £625.)

So from July until September employers will need to plan to be able to cover the cost of 10% – 20% of their employees’ wages, national insurance and pension contributions.

If you would like any assistance as we move into this next phase, the Accountancy team at Designated would be more than happy to work with you to ensure you are meeting new business requirements and responsibilities as an employer.

Our Head of Accountancy services Vicky, would be more than happy to discuss this in more detail with you, get in touch: vicky.garbett@designatedgroup.com.