We hope that 2021 and payroll may not be such a rollercoaster as 2020 was. However, there will still be planning that needs to be put in place.
Here are a couple of items that we believe people processing payroll need to watch out for in 2021.
Furlough is coming to an end
The re-instated Coronavirus Job Retention Scheme is due to be ending 31st March 2021, however, it is being reviewed in January. It currently gives all employees on leave, 80% of their pay, up to a maximum of £2,500. It is thought that the scheme protected over nine million jobs across the UK throughout the pandemic. Whatever is decided in January, we will ensure our payroll services will not be affected so our clients have peace of mind.
IR35 will go ahead in 2021
IR35 rules shift the responsibility for determining the tax status of a contractor from the worker to the organisation from the 6th April 2021. It will also require companies to understand their supply chain as the rules require an assessment of any individuals that are providing their services indirectly.
Increase in taxes
An increase in taxes is not set in stone however due to the government paying in the region of £39.3 billion to support those on furlough, we need to pay this back somehow. An increase in taxes is sure to be recouped from corporation tax as well as our pay packets. We, therefore, predict that there will be an increase in our income tax and NI contributions to fill the void.
We offer payroll services to a number of our clients so that we can lighten the workload of their finance team. If your company needs advice on any of the areas above especially payroll once these changes come into effect then please get in touch or call +44 (0) 207 183 8786 or email firstname.lastname@example.org