Queen’s Jubilee
The majority of employees should receive the NI cut directly via their November payroll!
What is the National Insurance increase reversal?
On 6 April 2022, National Insurance Contributions (NICs) increased by 1.25%. The NICs increase was due to be replaced by the Health and Social Care Levy in April 2023.
The Chancellor of the Exchequer confirmed in September 2022 that the increase will be reversed from 6 November 2022. Additionally, the new Health and Social Care Levy will no longer be introduced in April 2023.
From 6 November 2022 the main and additional rates of Class 1 employee NICs will be reduced by 1.25 percentage points to 12% and 2%. Class 1 employer NICs will also be reduced by 1.25 percentage points to 13.8%.
How will your employees receive the cut?
Depending on your payroll processes, the majority of employees should receive the NI cut directly via their November payroll. Some employees may not benefit immediately from the in-year reduction in NICs rates if you’re unable to update payroll software before 6 November 2022. These employees should receive the benefit retrospectively once updates to the payroll have been applied.
The Government’s policy paper makes clear that the reversal to the National Insurance increase will only apply prospectively from 6 November 2022. However, in case the new reduced rates are not applied to employees’ pay from 6 November 2022 for any reason, UK Government guidance states that, “although individuals should contact their employer for refunds as a first port of call in all circumstances, there may be circumstances where individuals may need to apply to HMRC for a refund. For example, if their employer is no longer trading, or if an individual has moved roles and their previous employer has confirmed they are unable to issue a refund retrospectively themselves”.
Does this change the Employment Allowance?
No. The Employment Allowance, an FSB-designed measure to remove the first £5,000 off every small employer’s NICs bill, will be retained at the same level. This means that small businesses can employ four staff on the living wage without paying any employer NICs.
Will there be a bank holiday for the King’s coronation?
It has been confirmed by Buckingham Palace that the coronation of King Charles III will be on Saturday 6 May 2023. The coronation ceremony will take place at Westminster Abbey in London, where the King will be crowned alongside the Queen Consort.
So the date has been set, but will there be a bank holiday to mark the occasion? As the coronation is taking place on a Saturday, a bank holiday won’t be called for that day (when a moveable bank holiday falls on a weekend, a substitute day is observed). There have been calls from some MPs for the early May bank holiday (currently to take place on Monday 1 May 2023) to be moved to Monday 8 May 2023 to create a long weekend or for an extra bank holiday to be announced, but there is no confirmation of an extra or moved bank holiday right now.
There are usually eight bank holidays in England and Wales each year (nine in Scotland). There is no statutory right for employees to take time off on bank holidays, this will depend on the terms of their contracts. Bank holidays can be included in the statutory minimum 5.6 weeks’ annual leave entitlement under the Working Time Regulations (pro rata for part-time workers). The Supreme Court confirmed in Harpur Trust v Brazel that the 5.6 weeks’ statutory minimum annual leave entitlement also applies to part-year workers including term-time only, zero-hours and casual workers, and should not be pro-rated for these workers.
If an additional bank holiday is granted, usually there will be no statutory right to time off so employers will need to review their contracts of employment to determine whether their staff are entitled to time off. For example, contracts that say employees have a right to 20 days’ annual leave plus time off on eight public/bank holidays where the bank holidays are listed and there is no extra flexibility in the wording, will not have an automatic right to time off. If there is no contractual right to time off, employers can choose to give their employees an additional day of paid leave or staff can make an annual leave request in the usual way.
The coronation will be a once in a lifetime event for many, being the first coronation to take place in 70 years, so employers should be prepared for an increase in requests for annual leave in the lead-up to the day itself. Although it takes place on a Saturday, employees who work weekdays only may still want to take annual leave to travel to London in advance of the ceremony.
While the traditional Monday to Friday jobs will not be affected by the coronation being on a Saturday, businesses that run on a Saturday should consider if they need staff to work and make preparations. Some may decide to close to give staff the opportunity to watch the ceremony/travel to London or because they don’t think they will be busy. Choosing to close means that staff who would have worked on that day will be entitled to full pay for the day off, unless the employer can agree that staff take annual leave (employees might stand their ground and not agree to put a request in). Alternatively, employers can enforce annual leave provided they give the right notice (twice the amount of notice as the annual leave they want the employee to take, ie two days’ notice would be required to enforce one day of annual leave).
Other employers may be extra busy and designate the coronation day as a day when no one can take annual leave. Employers could consider arranging for staff who are required to work to watch the ceremony or part of it while at work by giving longer breaks and the additional time being made up later or allowing breaks to be moved. Some businesses may be happy to work on a skeleton staff and increase annual leave caps for the day to give more staff the opportunity to take annual leave.
While the bank holiday position for the coronation has yet to be confirmed, employers should start to consider how the coronation may affect their businesses now that the date has been set and communicate their plans with their staff. It may seem a long time until the coronation but some employees will already have started thinking about when they want to take annual leave next year, so employers need to be prepared to respond to any annual leave requests, taking into account any expected peaks in demand and staffing levels.
UNIVERSAL CREDIT AND PENSIONS KEY CHANGES
UNIVERSAL CREDIT AND PENSIONS KEY CHANGES after 17th of November 2022.
People claiming Universal Credit could see their payments rise by as much as £52 a month if expected plans are put in place next week.
Benefits, including Universal Credit, and pensions are expected to rise 10 per cent in line with inflation if Rishi Sunak bows to increasing pressure ahead of next week’s Autumn Statement. The previous prime minister, Liz Truss, said pensions would increase in line with inflation, but Rishi Sunak has not confirmed this. The Prime Minister has made it clear that the Government faces “difficult decisions” to fix the economic turmoil triggered by Liz Truss’s doomed spell in No10.
How to view and prove your status and share this with third parties
Third parties may include employers and landlords.
It is important to note that EEA citizens should still be able to show their identity documents to prove their rights in the UK until 30 June 2021.
The Home Office will not issue physical proof of your status unless you are a non-EEA family member who has not previously been issued a biometric residence card.
The confirmation email and the PDF letter you receive are not proof of your status so you will need to log in to your online profile to prove your status.
To log into your online profile, you will need to:
- chose the identity document you used in your application, for example:
- Biometric residence card (BRC)
- National identity card
- Passport
- enter your passport/ID card/ BRC number
- enter your date of birth
- confirm who you are
A ‘one-time’ six-digit access code will be sent to your phone or email address, depending on what you have specified. This code is valid for a limited time. Once you enter it, you will be logged into your online profile and be able to view your Pre-Settled or Settled Status.
Once you have logged into your online profile, you can also navigate to “Prove your status to someone” and receive a ‘share code’ to prove your status to others, such as employers and landlords.
Don’t lose your Settled or Pre-settled status
If you have been granted Settled Status (also referred to as Indefinite Leave to Remain), you can spend up to five years in a row outside the UK without losing your status unless you are a Swiss citizen or the family member of a Swiss citizen.
Note that if you’re a Swiss citizen or the family member of a Swiss citizen, you can only spend up to four years in a row outside the UK without losing your Settled Status.
If you spend over this amount of time outside the UK without returning, your Settled Status will lapse. If this does occur and you wish to return to live in the UK, you will need to make a new application under a different route. Please note that the new application will need to meet the Immigration Rules in force at the time and therefore it is possible that some people may not be eligible to apply to return to live in the UK if their settled status lapses.
The Home Office can revoke your status if:
- You commit a serious criminal offence; or
- The Home Office believes that you submitted false information as part of your application.
Pre-Settled Status (also referred to as Limited Leave to Remain) is a temporary status that is valid for five years. If you want to stay in the UK for longer than this, you must apply for Settled Status within that five-year period.
It is possible to spend up to 2 years outside the UK without losing your Pre-Settled Status. However, if, for example, you spend a continuous year and a half out of the UK, though you will retain your Pre-Settled Status, it is unlikely that you will qualify for Settled Status. This is because you will not be able to demonstrate the required ‘continuous residence’ in the UK for at least five years. At present, there is no provision to extend a grant of Pre-Settled Status and so if you are unable to qualify for Settled Status before the expiry of your ‘Pre-Settled Status’, you may have to apply to remain in the UK on another basis.
If you spend more than two years outside the UK, your Pre-Settled Status will lapse. Your pre-settled status can be revoked if you commit a serious criminal offence, or the Home Office believes you submitted false information with your application.
Moving from pre-settled status to settled status
If you have been granted pre-settled status, you will still need to apply for settled status or you will lose your legal right to stay in the UK. You do not have to wait until the expiry date of your Pre-Settled Status stated in your Home Office decision letter.
As soon as you have lived in the UK continuously for five years, you should apply for settled status.
You need to have spent 5 years in a row living in the UK to switch from pre-settled to settled status.
During these 5 years, you can spend up to 6 months outside the UK in any 12-month period.
You might not be able to get settled status if you spend more than 6 months outside the UK.
The day your 5 years starts depends on whether:
- you’re from the EU, EEA and Switzerland
- you’re from a country outside the EU, EEA or Switzerland
If you’re from the EU, EEA or Switzerland
Your 5 years starting from the day you started living in the UK, not the day you got pre-settled status. You can apply for settled status before your pre-settled status expires – it’s a good idea to do this as soon as you have lived in the UK for 5 years.You don’t have to wait until your pre-settled status is about to expire to apply for settled status.
If you’re from a country outside the EU, EEA or Switzerland
The rules about when your 5 years of residence starts are different depending on if you’re a close family member or an extended family member.
You’re a close family member if you’re a:
- husband, wife or civil partner
- dependent parent or grandparent
- child or grandchild under 21 years old
- dependent child aged 21 or over
Your 5 years starts from either the day you arrived in the UK or the day you became a close family member of an EU, EEA or Swiss citizen, whichever was later. For example, if you came to the UK then married a German citizen, your 5 years starts on the day you got married. It doesn’t matter if the EU, EEA or Swiss citizen didn’t have settled or pre-settled status at the time.
You’re an extended family member if you’re a:
- long-term partner who isn’t married or in a civil partnership
- brother or sister
- aunt or uncle
- niece or nephew
- cousin
If you had a family permit when you arrived in the UK, your 5 years starts on that day. If you didn’t have one of these, your 5 years starts the day you got a residence card.
Why do companies consider buying business address services?
Here aresome reasons why many limited companies (or individual officers of a company) choose to buy a business address service:
1 Avoid public disclosure of your residential or home address
If you’re operating your business from home, it allows you to avoid public disclosure of your residential address. As the registered office address of a company (and the correspondence address of directors) is shown on the public company’s house register, you would have to disclose your address unless you purchase a registered address service – or have another optional address you can use for this purpose. Most people would prefer to keep their residential addresses private and use registered addresses services.
2Prevent unwanted visitors
A special case is where the company undertakes sensitive work or individual directors are involved in sensitive occupations. A company involved in political work or controversial activities – may be the subject of protests. In that case, the directors will be particularly keen not to disclose their home address on the public record.
Even for an uncontroversial business, it helps to protect you and your family from intrusion. Nobody wants unwanted visitors – be they disgruntled clients or business creditors – arriving at their homes.
3Reducing junk mail
Because the company’s registered address and each director’s service address are on the public register, these addresses will typically receive many unsolicited marketing emails. Marketers will often target the addresses of new and existing companies with advertising. A business address service, especially one where only official mail and not “spam” is forwarded on, can therefore help those running a company save time and avoid the frustration of handling junk mail.
4Prestige
A prestigious address – often a central London address – can lend your business a sense of status. To some customers and suppliers, a London address could increase your brand’s confidence and help boost your business.
5non-UK resident business owners
A company’s registered office address must be in the UK. Those who live outside the UK but are looking to form a UK company need to have an address in the UK for this purpose to be able to get all mail on time.
6Privacy
Even if you have a business address, you might not want your mail – addressed to you as a director of the company – being sent there, especially if all post is opened by staff daily. If you prefer to keep your official correspondence private from others in the business, you may prefer to have it sent to an alternative address.
7If you’re often away from home
If you spend a lot of time away from where you live, it may be easier to use a business address service so you can be confident official mail will be dealt with promptly rather than sitting at an address you won’t immediately access. Depending on your needs, you could arrange for mail to be forwarded to you at another address or scanned and emailed to you.
8Avoiding disruption if you plan to move
If you know you’ll be changing your address shortly or moving office, a business address service can solve all your hassles. Otherwise, you’ll have more work to do to tell the clients about the change of address, arrange for mail to be forwarded and company address to be updated.
9Restrictive leaseagreements or rental contracts
Many rental contracts or lease agreements don’t allow the property to be used as a company’s registered office or service address. In that case, you’ll need to find another address to use for the business.
If you need a business address service, please get in touch with us at info@capital-empire.co.ukor call on 07925769449.
VAT reverse charge for construction services’
The VAT domestic reverse charge for construction services starts on 1 March 2021.
It’sa major change to the way VAT is collected in the construction industry.
The reverse charge will affect you if both:
- you’re registered for VAT
- you supply or receive services under the Construction Industry Scheme (usually known as CIS)
Where the reverse charge applies, the customer pays the VAT due directly to HMRC instead of paying it to their supplier.
When you must use the VAT reverse charge for building and construction services
–You must use the reverse charge for the following services:
- constructing, altering, repairing, extending, demolishing or dismantling buildings or structures (whether permanent or not), including offshore installation services
- constructing, altering, repairing, extending, demolishing of any works forming, or planned to form, part of the land, including (in particular) walls, roadworks, power lines, electronic communications equipment, aircraft runways, railways, inland waterways, docks and harbours, pipelines, reservoirs, water mains, wells, sewers, industrial plant and installations for purposes of land drainage, coast protection or defence
- installing heating, lighting, air-conditioning, ventilation, power supply, drainage, sanitation, water supply or fire protection systems in any building or structure
- internal cleaning of buildings and structures, so far as carried out in the course of their construction, alteration, repair, extension or restoration
- painting or decorating the inside or the external surfaces of any building or structure
- services which form an integral part of, or are part of the preparation or completion of the services described above – including site clearance, earth-moving, excavation, tunnelling and boring, laying of foundations, erection of scaffolding, site restoration, landscaping and the provision of roadways and other access works
When you not use the reverse charge
Do not use the charge for the following services, when supplied on their own:
- drilling for, or extracting, oil or natural gas
- extracting minerals (using underground or surface working) and tunnelling, boring, or construction of underground works, for this purpose
- manufacturing building or engineering components or equipment, materials, plant or machinery, or delivering any of these to site
- manufacturing components for heating, lighting, air-conditioning, ventilation, power supply, drainage, sanitation, water supply or fire protection systems, or delivering any of these to site
- the professional work of architects or surveyors, or of building, engineering, interior or exterior decoration and landscape consultants
- making, installing and repairing art works such as sculptures, murals and other items that are purely artistic signwriting and erecting, installing and repairing signboards and advertisements
- installing seating, blinds and shutters
- installing security systems, including burglar alarms, closed circuit television and public address systems
- Working with private clients
Zero rate VAT
You may not have to charge VAT on some types of work if it meets certain conditions, including:
Building new homes
You may not have to charge VAT on labour or building materials for work you do on a new house or flat.
- building a new house or flat
- work for disabled peoplein their home
· End users
- For reverse charge purposes consumers and final customers are called end users. They’re businesses, or groups of businesses, that are VAT and Construction Industry Scheme registered but do not make onward supplies of the building and construction services supplied to them.
- The reverse charge does not apply to supplies to end users where the end user tells their supplier or building contractor in writing that they’re an end user.
Invoices and other VAT documents
Invoices
When supplying a service subject to the domestic reverse charge, suppliers must:
- show all the information required on a VAT invoice
- make a note on the invoice to make it clear that the domestic reverse charge applies and that the customer is required to account for the VAT
- clearly state how much VAT is due under the reverse charge, or the rate of VAT if the VAT amount cannot be shown, but the VAT should not be included in the amount charged to the customer
Please see vat invoice example attached
If you have any questions in regards vat reversal charge, please contact us.