Tag: payroll services

All You Need to Know about the COVID-19 Kickstart Scheme

Since the first national lockdown in March 2020, the government have implemented a variety of schemes to provide financial support to businesses and workers throughout the UK.

2020 saw a record number of redundancies, and one of the hardest hit brackets was 16-24-year-olds. What’s more, one of the most affected sectors is the leisure and hospitality industry who are heavy recruiters of this age bracket. Thousands of young people also left full time education last year with limited employment prospects. As such, the government launched a £2 billion fund aimed at generating more employment opportunities for young people. Introducing: the COVID-19 Kickstart Scheme.  

What is the COVID-19 Kickstart Scheme?

The scheme is specifically aimed at young people between 16 and 24, who are currently claiming Universal Credit and may be at risk of long-term unemployment. The government will fund 100% of job placements for young people, covering national minimum wage for 25 hours a week as well as national insurance and pension contributions so there is no cost to the business. You can choose to offer more than the national minimum wage, and more than 25 hours per week, however this won’t be covered by government funding and you will have to pay the difference.

How Does the Scheme Work?

Any organisation, no matter how big or small, can apply to the scheme. There are however some criteria that the placement must meet:

  • It must last at least six months and be for at least 25 hours work per week.
  • The placement must not be for a role that has already been advertised.
  • The placement must not cause existing employees or apprentices to lose their job or have their employment reduced.
  • The role shouldn’t require extensive training before the placement can start.
  • It must include support for young people to help them get work after they finish (if they’re not taken on longer term following the placement).

How Do I Apply?

The scheme was officially launched in September 2020 and is expected to continue until at least December 2021. When the scheme first launched there was initially a caveat that employers would have to offer a minimum of 30 placements to qualify for the scheme. However, as this was ruling out many smaller employers, the government has recently removed this requirement.

To apply for the scheme, you can either do so online yourself or you can seek the assistance of a Kickstart gateway who is already working with the Kickstart scheme. A Kickstart gateway can be any type of organisation, but one that already has a Kickstart Scheme grant agreement in place, which they can add employers and job placements onto. More information can be found here.

What are the Benefits to my Business?

It’s clear that the COVID-19 Kickstart Scheme will help a lot of young people get back into employment, but this is also a great opportunity for businesses and employers. As the placements are fully funded by the government, businesses can benefit from an increase in skills and support, with no additional cost. There isn’t a long term commitment to provide roles after the 6 month placement has been completed, and providing all the necessary criteria are met, each employer will receive a £1,000 grant for every successful job placement.

How Can We Help?

If you are considering taking part in the COVID-19 Kickstart Scheme and as such may be dealing with an increased workforce, let your payroll be one less thing for you to worry about.

Want to find out more? Our friendly, knowledgeable team are on hand ready to help talk you through the best options for you and your business.

Contact us today to discuss your payroll solutions and what we can do for you.

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Last Minute Guide to IR35

Chancellor Rishi Sunak’s Budget announcement on March 3rd, 2021 has confirmed that there will be no further postponement to the private sector rollout of the off-payroll legislation, also known as IR35.

Although the IR35 changes have already been postponed a year, due to the COVID-19 pandemic, many businesses were calling for a further delay and were undoubtedly holding out hope for a last minute U-turn.

However, the IR35 changes are going ahead as planned and will come into effect on 6th April 2021 with many businesses having taken the delay from April 2020 as an opportunity to meet the new compliance conditions.

Although some businesses are ready, due to the speculation of a further deferral, some may not be fully prepared for the new rules and how it may impact them. We’ve prepared a last minute guide below, for all things IR35, to make sure you’re ready.

A Quick Reminder – What Is IR35?

The IR35 laws were first introduced in 2000 in an effort to identify ‘disguised employees’ within businesses. IR35 legislation ensures off-payroll and on-payroll workers are taxed fairly and accordingly. Breaking this down, this means that if a contractor is working under the exact same conditions as a contracted employee, then IR35 rules make sure that the contractor pays the same tax and national insurance contributions as their employed counterpart.

What Are The New Rules?

The change coming into play on 6th April 2021, concerns who will make the IR35 determination. At present, contractors themselves are responsible for determining their employment status, and whether or not they’re working outside IR35 rules. When the new rules come in, this responsibility will shift to the client (i.e., agency).

Agencies will be responsible for determining the employment status of their workers and whether they fall inside or outside of IR35. For example, if you are registered as self-employed, but are found to be working as an employee, the agency will be responsible for paying any additional tax due.

Who Will Be Affected By The Changes?

The legislation change applies to all medium, large or private sector businesses and agencies. Contractors in particular will be affected, including those who work in construction, IT and engineering, to name a few.

The new IR35 rules don’t, however, apply to all businesses. Currently, small business as well as sole traders and PAYE agency workers, are exempt. There are also situations where it is possible to work outside the scope of IR35, for example if you are a limited company contractor genuinely working on your own, i.e., using a contractor to provide services, not ‘employed’ by a client.

How Can We Help?

With less than three weeks to go until the IR35 changes come into effect, if you’re still feeling unsure about how these changes will impact your business and need some guidance with your payroll, we are here to help.

Our friendly, knowledgeable team are on hand ready to help talk you through the best options for you and your business.

Contact us today to discuss your payroll solutions and what we can do for you.

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The National Living Wage and National Minimum Wage are increasing in April 2021: Are you ready?

Chancellor Rishi Sunak recently unveiled his 2021 Budget that will see millions of workers across the country receive a pay rise.

Amongst the raft of additional financial support for both people and business that was announced on 3rd March as we continue to feel the impact of the pandemic, was the welcome news that as of 1st April this year, there will be a 2.2% increase to the National Living Wage, lifting it from £8.71 per hour to £8.91 per hour.

The National Living Wage previously only covered those aged 25 and over. However, the age threshold to qualify has now been extended to cover anyone aged 23 and over. This means over two million of the lowest paid workers in the UK will benefit from this increase.

For those under the age of 23, the National Minimum Wage has also been boosted, to £8.36 for those aged 21-22 and £6.56 for 18–20-year-olds.

The rate of pay for apprentices has also increased by 3.6% and the Chancellor has further announced that the incentive payments to businesses for recruiting apprentices will be doubled to £3,000 for all new hires, of any age.   

It’s worth noting that there weren’t any changes announced in regard to pensions, for both employer and employee contributions. Additionally, at present there are no changes to employee national insurance rates.

We’ve outlined the wage increases by age in the table below:

Age RangeLast YearFrom April 2021
Apprentice Rate£4.15£4.30 (up 3.6%)
Age 16-17£4.55£4.62 (up 1.5%)
Age 18-20£6.45£6.56 (up 1.7%
Age 21-22£8.20£8.36 (up 2%)
Age 23 or over£8.72£8.91 (up 2.2%)

How Can We Help?

Whilst the increases to both the National Minimum Wage and the National Living Wage are welcome news for low paid workers across the UK, there are cost implications for employers who will need to factor in the increased labour cost to their operating costs.

If you are unsure about how the wage changes will impact your business and need some help with your payroll, we are here to help.

Our friendly, knowledgeable team are on hand ready to help talk you through the best options for you and your business.

Contact us today to discuss your payroll needs and what we can do for you.

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Construction Industry VAT Domestic Reverse Charge

Construction Industry VAT Domestic Reverse Charge

What is the VAT Domestic Reverse Charge?

The VAT Domestic Reverse charge was first announced by HMRC in 2017, in a move to combat VAT fraud in the Construction Industry Scheme (CIS).

An example of this type of fraud is when a contractor is paid via a Limited Company and bills for VAT, but then does not fulfil their own VAT commitments.  This type of fraud is widely seen and often involves inactive companies which are set up to steal VAT, whilst working alongside legitimate businesses.

It was initially due to come into play in October 2019 but was pushed back twice due to Brexit and Coronavirus. The new implementation date has been set as 1st March 2021. This will only affect businesses within the supply chain providing CIS services.

The change focuses only on Building or Construction services and will shift the responsibility for accounting for VAT on ‘specified services’ from the supplier to the recipient. The ‘specified services’ are noted in sections 5 and 6 of the Statutory Instrument for VAT Reverse Charge for Building and Construction Services. More information can be found here.

The VAT Domestic Reverse Charge will apply where:

  • CIS applies, AND
  • The services are not applied to a direct end user, AND
  • The services are listed within the services listed in article 5 and NOT listed within article 6 of the Statutory Instrument.

Points to Note

There are a few key points to note in addition to the criteria above; the charge can only affect the specified services between VAT registered companies, and there cannot be a connection between said companies i.e., if they’re in the same commercial group. Furthermore, only standard rate or reduced rate supplies will be affected.

So, what does this mean? 

This can be viewed as good news for Employment Businesses and Intermediaries alike as the latest government guidance states “employment businesses who supply staff and who are responsible for paying temporary workers they supply, are not subject to the reverse charge”. Implementation of the charge would likely have caused strain on cash flow and result in significant changes to the business in procedure. With that said, it’s still important to be aware of the upcoming changes as it may impact the supply chain in such a way that you could still be affected.

We’ve included a flowchart below, detailing how the charge will work and to help you determine whether you should apply the domestic reverse charge or not.

Want to find out more? Our friendly, knowledgeable team are on hand ready to help if you believe that the new VAT domestic reverse charge rules apply to your business. Contact us today to discuss what we can do for you.

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The New Lockdown Grants: Who is Eligible and How to Apply

As the country was plunged into another coronavirus lockdown on 6th January 2021, which is currently expected to last until at least the end of February, consumer-facing businesses were once again left terrified for their business’s survival.

Businesses in the retail, leisure and hospitality sectors have endured months of closure since the first national lockdown in March 2020, followed by a cycle of limited time reopening’s, causing a huge drop in profits.

It’s clear that help is needed to get through this lockdown and to the better days of Spring we’re all wishing for. Chancellor Rishi Sunak has responded by announcing a one-off grant worth up to £9,000 to support these businesses. The total package, costing an estimated £4.6 billion, is expected to assist more than 600,000 businesses who are unable to operate due to the latest lockdown restrictions.  

In this blog, we’ll be taking a look at who is eligible and how to apply.

How Much Is My Business Entitled To?

If your business is in the retail, leisure or hospitality sector which has been legally required to close in the latest lockdown, and cannot operate effectively remotely, then you are eligible for a grant.

The amount of the grant to be offered will be based on the level of business rates typically paid by each business as outlined in the table below.

Rateable Business ValueClaim
£15,000 or lessUp to £4,000
Between £15,000 and £51,000Up to £6,000
More than £51,000Up to £9,000

How Do I Apply for a Grant?

All businesses need to apply through their local authorities. Click here to be taken to the government website to find the right local authority to contact to submit your application.


What If My Business Is Not Eligible But I Still Need Financial Support?

An additional £594 million is also being made available for local authorities and the devolved administrations to support businesses who may not be eligible for the grants.

From this discretionary fund, the Scottish government will receive £375 million, the Welsh government £227 million and Northern Ireland £127 million.

As with the one-off top up grant, you should contact your local authority to ask for support and see how much you might be eligible for.

Are There Any Other Options Available To Support My Business Through Lockdown?

Yes, the Coronavirus Job Retention scheme, otherwise known as the furlough scheme, has been extended until April and the 100% business rates relief measure is in place until the end of March.

Additionally, if you claim one of the one-off top up grants, you will still be eligible for other business support measures in place such as grants worth up to £3,000 for closed businesses and grants up to £2,100 each month for businesses who have been impacted, once they reopen.

How Can We Help?

As the stresses of 2020 have followed us into 2021, we understand that it continues to be a stressful and uncertain time to be a business owner. Here at Red Ark, we pride ourselves on the expert and individualised service we can deliver, with a personal touch. Let your payroll be one less thing for you to worry about.

Want to find out more? Our friendly, knowledgeable team are on hand ready to help talk you through the best options for you and your business. Contact us today to discuss your payroll solutions and what we can do for you.

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Our 2020 Highlights

2020 has been a year that none of us could have predicted. With an unprecedented number of people worldwide affected by the global pandemic and a changing political landscape, here at Red Ark, we are hopefully looking towards 2021 as the year that things might start to get back to normal. 

Although it’s been a year of ups and downs, we wanted to share Red Ark’s Top 5 2020 highlights. 

  1. We launched our brand new Red Ark website – take a look around! Check out our other blogs here. 
  2. We opened 2 new offices in Southampton and Glasgow giving Red Ark more coverage across the UK – you can get in touch with us here. 
     3- Three’s the charm! On average, Red Ark partnered with 3 new agencies every month in 2020, building relationships and supporting our clients with all their payroll requirements. 
  1. We expanded our Sales Team with 4 new Business Development Executives. Want to get in touch? Check out our LinkedIn! 
     
  1. In December 2020, we paid 5 times the number of contractors than we did in January 2020. 

In 2021, we’re looking forward to guiding our customers, from Brexit to IR35 changes, we’re on hand to answer any questions you may have. Feel free to get in touch and ask any of our experts how we can bring your business up to speed in the new year.  

From all of us at Red Ark, have a happy Christmas and New Year. 

Team Red Ark 

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Why Choose Red Ark?

Payroll is an integral part of every business but with so much payroll information out there, it can quickly become confusing and overwhelming. At Red Ark, we understand that payroll is a key part of businesses running smoothly, and you need a payroll company who you can trust and more importantly, one that understands your business’s needs. 

Fully Reliable 

We specialise in outsourced payroll solutions for you, whether you’re an employer, a contractor, or self-employed.  

Our team of friendly professionals have years of experience and will make sure you have a payroll system to suit you, your business, your budgets, and most importantly is 100% compliant. 

Fully Compliant 

With tax and employment laws changing constantly, we make it our business to stay on top of every rule, regulation and law so that you can maintain compliance and get on with the important stuff.  

We know that mitigating risk is crucial to every business, which is why we ensure all our supply chains and partners are fully compliant, ensuring your business is always in the right lane and up to date. 

It’s Personal 

At Red Ark, we offer excellent service with a personal touch, with a customer manager at each of our locations, so you can always speak to someone who knows exactly what you need.  

With our headquarters in Dunfermline, we keep in close contact with our branches across the UK to maintain our high standards of client care.  

Want to find out more? Our team are on hand ready to help talk you through the best options for you and your business.  

Get in touch today with our friendly, knowledgeable team to discuss your payroll needs and what we can do for you.  

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Payroll Mythbuster 

Many people have misconceptions about the way payroll works, who manages it, and what it means for businesses. In this blog, we address four payroll myths to set the record straight. 

Myth 1: Payroll is all about the numbers. 

Most people think payroll is only about the numbers, and of course, they are very important in this line of work, but payroll is about so much more than that. From ensuring we are compliant with and understand new tax laws, to make sure we adhere to follow government guidelines and communicating with our contractors and agencies our payroll team have a lot more than numbers to keep them busy! 

Myth 2: Payroll doesn’t take more than one day per month. 

Payroll is a demanding job which requires time management, interpersonal skills, high levels of the organisation, as well as an excellent head for numbers. It also requires a certain amount of adaptability as the landscape with payroll can change, making an understanding of compliance laws and changes in HMRC guidelines imperative. 

Myth 3: Payroll only deals with salaries. 

As you can probably tell by now, payroll experts aren’t just ‘one-trick ponies’ – they also take care of invoicing, pension schemes, statutory deductions, and much more.  

Myth 4: Payroll doesn’t require much training. 

Our payroll team are experts in their field and usually have gained a qualification in accounting or something similar. As well as professional qualifications, our team have real-world experience, meaning they are able to tackle a myriad of payroll issues from the simple to the more complex. 

Want to know how we can keep your business growing by offering compliant payroll solutions? Contact our friendly, knowledgeable staff today to discuss what we can do for you. 

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