ENTERPRISE
WELCOME
Welcome to our summer edition of Enterprise. As we head into August, our thoughts turn to holidays and perhaps taking some time away from work to enjoy a much-deserved break. However, when you run your own business, taking a break can be challenging. Also, for anyone running a holiday or seasonal business, this can be your busiest time of year and taking a break now just isn’t possible.
In this newsletter we consider a number of topics that touch on this area including temporary/seasonal workers, planned changes to the holiday let rules, managing seasonal highs and lows and VAT rules when travelling abroad for work, to name but a few.
Whilst I have deliberately steered away from covering anything related to the election, it would be remis of me not to mention this. As expected, we have a change at number 10 and over the coming months this will no doubt bring changes to the business world. The team and I will endeavour to keep you abreast of these changes through future newsletters and our social media content.
And to end, for those of you that know me personally, you will know that I am a big sports fan and it’s been great to have so much sport to watch recently such as the Football, Wimbledon and now the Olympics. Whilst the football team may not have “brought it home”… there were certainly some entertaining twists and turns along the way!
Mike Cahill Partner
UPCOMING TAX DEADLINES
AUGUST 2024
1st Payment of corporation tax liabilities for periods ending 31 October 2023 for small and medium sized companies not liable to pay in instalments.
7th VAT return and payment for June quarter (online).
19th PAYE/CIS liabilities for month ended 5th August 2024 if paying by cheque. File monthly CIS return.
22nd PAYE/CIS liabilities for month ended 5th August 2024 if paying electronically.
SEPTEMBER 2024
1st Payment of corporation tax liabilities for periods ending 30 November 2023 for small and medium sized companies not liable to pay in instalments.
7th VAT return and payment for July quarter (online).
19th PAYE/CIS liabilities for month ended 5th September 2024 if paying by cheque. File monthly CIS return.
22nd PAYE/CIS liabilities for month ended 5th September 2024 if paying electronically.
OCTOBER 2024
1st Payment of corporation tax liabilities for periods ending 31 December 2023 for small and medium sized companies not liable to pay in instalments.
5th Deadline to register with the HMRC if you became self-employed or started receiving income from property during the 2023/24 tax year.
7th VAT return and payment for August quarter (online).
19th PAYE/CIS liabilities for month ended 5th October 2024 if paying by cheque. File monthly CIS return.
22nd PAYE/CIS liabilities for month ended 5th October 2024 if paying electronically.
31st Deadline for paper self-assessment returns to be submitted for the 2023/24 tax year.
HOW TO KEEP YOUR BUSINESS DATA SAFE WHEN WORKING ABROAD
A guide with 5 practical tips to protect your sensitive information from cyber threats.
INTRODUCTION
Working abroad can be an exciting and rewarding experience, but it also comes with some risks for your business data. Whether you are traveling for a conference, a meeting, or a vacation, you need to be aware of the potential cyber threats that can compromise your sensitive information. Here are 5 top tips to keep your business data safe when working abroad.
TIP 1: USE A VPN
A VPN, or a virtual private network, is a service that encrypts your internet traffic and routes it through a secure server in another location. This way, you can access the internet as if you were in your home country, and avoid the censorship, surveillance, or hacking that might occur in some foreign networks. A VPN also allows you to access your business resources, such as email, cloud storage, or intranet, without exposing them to prying eyes. Make sure you choose a reputable VPN provider that has a strong encryption, a nologs policy, and a large network of servers.
TIP 2: AVOID PUBLIC WI-FI
Public Wi-Fi networks, such as those in airports, hotels, cafes, or libraries, are convenient, but they are also very insecure. Anyone on the same network can intercept your data, or even create a fake hotspot to lure you in. If you have to use public Wi-Fi, make sure you use a VPN to encrypt your traffic, and avoid accessing any sensitive or confidential information, such as your bank account, your credit card, or your business documents. Alternatively, you can use your mobile data, or a portable hotspot, to create your own secure connection.
TIP 3: UPDATE YOUR DEVICES AND SOFTWARE
Before you travel, make sure you update your devices and software to the latest versions. This will ensure that you have the most recent security patches and bug fixes and
that you are protected from any known vulnerabilities. You should also enable automatic updates so that you don’t miss any critical updates while you are abroad. Additionally, you should install reliable antivirus and firewall software on your devices and scan them regularly for any malware or viruses.
TIP 4: LOCK YOUR DEVICES AND USE STRONG PASSWORDS
Physical security is also important when you are working abroad. You should always lock your devices when you are not using them, and never leave them unattended in public places. You should also use strong passwords, or better yet, biometric authentication, such as fingerprint or face recognition, to unlock your devices. Furthermore, you should enable encryption on your devices, and use a password manager to store and generate your passwords. This way, even if your devices are lost or stolen, your data will be safe from unauthorized access.
TIP 5: BACKUP YOUR DATA
Finally, you should always backup your data before you travel, and regularly while you are abroad. This will ensure that you have a copy of your data in case something happens to your devices, or if you need to wipe them remotely. You should also enable the find my device feature on your devices, so that you can locate, lock, or erase them if they are lost or stolen.
Libby Fogden 2nd Line Support Analyst
FURNISHED HOLIDAY LETS –WHAT CHANGES ARE COMING?
On 6 March 2024, The Chancellor Jeremy Hunt, announced in his Spring Budget the decision to abolish the beneficial tax regime available for furnished holiday lets. It has been announced that these changes will take place from 6th April 2025.
WHAT ARE THE CURRENT RULES?
The furnished holiday let (FHL) regime allows qualifying properties to be treated as trading assets and the income as trading income. FHLs are furnished properties situated in the UK or EEA which are let commercially for short term lets. HMRC specify the strict conditions which must be met to be entitled to the FHL regime.
The FHL regime allows owners to access favourable tax treatment, some of the key areas are shown below:
Savings by claiming capital allowances for the purchase of items such as furniture, equipment and fixtures.
The ability to deduct the full finance costs such as mortgage interest costs, which is no longer available for residential rental properties owned by individuals outside this regime.
The ability to claim business asset disposal relief (BADR) at the point of sale, where qualifying this would reduce the tax applied on capital gains from 18%/24% to 10%.
The ability to claim business asset holdover relief, allowing the gift of the property without a charge to capital gains tax on the person making the gift.
Income tax savings, as profits can be considered relevant earnings to allow tax efficient pension contributions to be made.
We have not mentioned any relief which may be available for inheritance tax (IHT) as in most cases FHLs do not meet the trading requirements for IHT.
WHAT ARE THE MAIN CHANGES?
Following the abolition of the FHL scheme, we anticipate that most holiday lets will no longer be able to be treated as trading.
HMRC have challenged claims for rental properties to be treated as trading for a number of years. In most cases they consider that rental properties are investment assets rather than trading assets. For a rental business to be treated as a trading business, a high level of additional services must be provided.
There have been requests for a clear test to be provided by HMRC to allow property owners with some clarity on what additional services need to be provided for a rental business to be considered as trading. There are no suggestions that this will be forthcoming so taxpayers should consider their business on a case by case basis and we anticipate that the majority of rental business will not qualify.
Where a rental business is not able to be treated as trading there will be some key impacts.
You will only be able to claim basic rate tax relief on any qualifying finance costs, such as mortgage interest.
You will no longer benefit from claiming capital allowances in relation to the property business.
You will have a reduction in relevant earnings for pension purposes, potentially restricting the tax relief
on your pension contributions. This will depend on your other earnings and level of contributions.
It is likely that you will not meet the trading test for BADR so any gain you make on the sale of the property will be taxed at 18% or 24%.
No business asset holdover relief will be available, meaning that if a property were to be gifted an immediate charge to capital gains tax will arise, even if no consideration is received.
It should be noted that even with the loss of capital allowances you will still be able to obtain tax relief on certain rental expenditure, as shown below:
Capital expenditure on the property will be deductible only at the time of sale to reduce the capital gains tax liability.
Revenue expenditure for the day to day running of your rental business, such as agents fees, utility bills and repair and maintenance incurred on the property will be deductible from rental profit.
Costs incurred for replacement of domestic items will be deductible from rental profits. You will no longer be able to claim for the initial purchase of these items.
REMAINING UNCERTAINTY
Following the budget, no detail has been announced to clarify what will happen for any FHL owners who have made previous capital allowance claims. It is anticipated that owners would need to treat all items as if they were sold at their current market value, creating a balancing charge on any asset which still retains a value as at 5th April 2025.
This will have the impact in increasing profit levels for the 2024/25 tax year, potentially increasing or creating a tax charge.
Following the general election on 4th July 2024 we will wait to see if any changes are announced. The FHL regime has always been considered a temporary measure and therefore we would not expect any of the parties to reinstate this.
Owners of FHLs should consider the tax impact of these proposed changes very carefully. If they were looking to gift or sell the property in the near future, they may consider moving plans forward so that any transactions are undertaken prior to 6th April 2024, to take advantage of BADR or holdover relief.
Caution must be exercised here though as the budget made specific reference to anti forestalling measures. These types of measure are usually imposed to prevent taxpayers putting unconditional contracts in place to crystallise a gain prior to the rule changes, however as we have no concrete guidance, taxpayers should be aware of this when making decisions.
At Albert Goodman, we can help owners of FHLs quantify the tax impact of these changes and consider future options.
Hannah Hopkins Chartered Tax Advisor
hannah.hopkins@albertgoodman.co.uk
MANAGING PRODUCTIVITY OVER THE SUMMER HOLIDAYS
Managing productivity and staffing levels during the summer can be a challenge for many businesses. You may find yourself under-staffed as employees take annual leave to spend the holidays with their families, or you may find you’re rushed off your feet due to the seasonality of your business. So, how do you manage this and ensure everything continues to run smoothly over summer?
1. Early planning is essential
You need to have visibility of the impact of summer on your expected output and your staffing levels. Use quieter periods to forecast and manage this ahead of time. If, for instance, you are in the tourism sector, you should have staff book their holidays as far ahead as possible and communicate a policy that not too many people should be off at one time. You can help people have visibility of this by using a shared calendar, either electronically or even on the office wall.
2. Could flexible working help?
So, you’re ahead of the game and your staff have booked their summer holidays and wrote it on the calendar, but now someone comes to you and asks for a morning off for a dentist appointment. You run the risk of alienating the employee if they don’t get the time off, but there is a lot of work to do. Instead of saying no, can your business allow flexible working to this staff member? Can they work at home so they’re close to the appointment? Can they make the time up the next day? Being open to this will allow compromise and should keep your employees motivated and on side.
3. Cross-training employees
To help ease staff pressures, could you train employees to handle multiple roles in the business? If you know someone is off on their travels for two weeks, could you get someone to sit with them in advance to learn how to do some of their workload, so it’s not piled up for when they get back? Not only will this help work get done and give them more skills to make them feel you’re investing in them, but it will also mean the employee coming back from their time off will not get burnt out when they return.
4. Hire temporary staff
If these options above don’t work, then perhaps it’s time to put out some summer job adverts. See our article on this for more information.
5. Hold catch-up meetings
It’s important that employees feel listened to, especially if you anticipate high workloads. Be transparent and promote collaborative communication between the team. You should hold regular huddles to touch base with your staff to understand struggles and concerns so that you may be able to help. Don’t forget to reward and thank good work too! I’m sure some biscuits wouldn’t go amiss after a particularly hard week.
Overall, managing productivity and staffing over the summer holidays is a challenge many businesses face and requires pro-active planning, flexibility, and effective resourcing. By using some of these ideas above, hopefully you can overcome such challenges and still make summer a productive and efficient season in your business.
Ellis Hillman Business Services Assistant Manager
OVERSEAS VAT REFUNDS – HOW DO YOU RECOVER VAT SUFFERED WHEN YOU ARE TRAVELLING ABROAD FOR WORK?
If your business suffers local VAT (or a similar “Goods and Services tax”) on trips abroad, the overseas VAT is not reclaimable on your UK VAT return.
Instead, it may be possible to reclaim the local tax paid directly from the local tax authority. EU member states all have a refund scheme, but not all non-EU territories offer the same.
SUFFERING VAT IN AN EU TERRITORY
UK businesses who have no place of business within the EU, and who are not required to be registered in the EU country where it is being charged local VAT, should generally be able to submit (“13th Directive”) claims to the relevant tax authority to reclaim some local VAT on business expenditure. There is a slightly different mechanism for businesses who do have a presence in the EU, which is not covered in this article.
Making a claim is subject to conditions, including the following:
Claim forms must normally be completed in that state’s local language,
accompanied by original VAT invoices, a certificate of status issued by HMRC in the UK Get confirmation from HMRC that you are trading in the UK - GOV.UK (https:// www.gov.uk/guidance/get-confirmation-from-hmrcthat-you-are-trading-in-the-uk),
and must (normally) be submitted by 30 June of the following year.
Member states can impose restrictions on the type of expenditure that qualify for refunds, and in particular, may restrict VAT recovery on travel and subsistence costs or if sales are exempt from VAT.
EU states can also insist that claimants appoint a tax representative, i.e. a local agent who may be jointly and severally liable for any VAT due.
SUFFERING VAT OR GST OUTSIDE THE EU
Rules vary. For example, it is our current understanding that the Australian Tax Office does not permit refund claims for GST incurred by non-established businesses that are not registered for GST in Australia. However, it may be possible to register for Australian GST, even if no supplies are made in Australia, to reclaim some local GST.
CONCLUSION
Clearly, if your business is undertaking a project overseas then you should be considering the VAT and other tax consequences generally, and recovery of VAT suffered on local expenditure is just part of this. For one off or ad hoc trips, the admin burden may outweigh the cost of the oversea’ s tax you are trying to recover.
You should consider whether your supplier is legally obliged to charge VAT to you, as an overseas business. Clearly, if VAT is not chargeable you don’t need to go through a process to reclaim it (and the Tax Authorities may disallow a claim for VAT that should not have been charged.)
In terms of available resources, some Tax Authorities, for example the Irish Revenue Commissioners, have a decent website in English. A list of National Tax websites (EU states only) can be found at National Tax Websites - European Commission (europa.eu)
Some of the Big4 firms produce country by country guides (although note the caveats therein about relying on them.)
Or you might want us to put you in touch, and liaise, with a local advisor from our Praxity network who can assist.
Steve Chamberlain VAT Senior Manager steve.chamberlain@albertgoodman.co.uk
REMAINING ACTIVE ON SOCIAL MEDIA WHILST ALSO TAKING A BREAK
So, you are off on a well-earned holiday, but what does this mean for your social media platforms? It’s important that they don’t get neglected, but you also need some time to fully unwind without the worry of having to login every day. With a bit of pre-planning and scheduling, you’ll be able to go away and enjoy your break without having to worry about posting.
One of the key elements to social media marketing is consistency. So that means, regularly posting and keeping your online presence going. The more you post, the more familiar people become with you and your business, so it’s important to remain active even though you are away.
Scheduling your content ahead of time is a great way to keep your social media active.
There are lots of scheduling platforms available – Hootsuite, SproutSocial to name a few – that allow you to do this (plus a whole host of other useful features). Some social media platforms also allow you to schedule in the platform itself making it even easier to plan ahead.
Before you go into holiday scramble-mode, it’s a good idea to in the weeks before your upcoming break that you sit down and make a comprehensive plan - what is it that you want to post whilst you are away? What days and times do you need to post them? Are you going to let people know you are away? What key messages do you want to get across? I would then recommend batch creating content ahead of time. Whether that’s carousels, quotes, polls, giveaways etc, set aside some time to create the things you need (I would always recommend a mix of content), either on programmes like Canva or your preferred content creating platform.
Try writing a list of all the content you’ll need and the topics you want to cover, then write your captions for these posts as well as plan their hashtags (if you use them!) ahead of time. Once you have these ready, you will then be able to login, upload and schedule. They will then automatically publish, and you can go away and enjoy your break.
There is also always the option to outsource the job to a trusted social media professional who can take care of things whilst you are away, but whatever you decide, you can go away and have peace of mind that your social media is taken care of.
Stacey Jabbitt Marketing Assistant Manager
SUMMER STAFF PARTIES –WHAT’S ALL THE FUSS ABOUT?
The sun is shining (sort of!) and you’re planning on holding a summer event/party for your employees, in the hope of soaking up some rays and boosting team morale. But what is HMRC’s opinion on this? Soften the tax blow by being aware of the rules, and don’t get stung by the taxman!
The general principle is that if you provide employees with a perk or benefit, including staff parties, then this is a taxable benefit for the employee, meaning your employees will have to pay tax on this. BUT, an exemption to this applies, provided that you meet the following conditions:
The party/event is an “annual event”
The event is open to all employees
The average costs of the event (or events if you hold more than 1 per year) per head for all employees attending does not exceed £150 INCLUDING VAT. This magic £150 figure also includes putting on transportation to the event itself, should you wish to do so.
What is an “annual” event?
Whilst appearing to be a rhetorical question, “annual” is interpreted by HMRC as “something that happens once a year on a recurring basis”. Summer events or Christmas galas therefore would fit the bill nicely, whereas regular meals out or afternoons at the races would be unlikely to qualify! Similarly, one-off events to mark an anniversary or important milestone in your business by their very nature can not be considered as “annual”.
The main thing to note is that your “intention” must be for the event to be an “annual” one. Provided that this is communicated clearly in your invite, then it will pass this test.
What constitutes an event “open to all employees”?
If your business has more than one location, an annual event that’s open to all of your staff based at one location still counts as exempt. You can also put on separate parties for different departments, as long as all of your employees can attend one of them.
What if I hold multiple “annual” events” but end up exceeding the £150 per head combined limit?
If any of the events cost less than £150 per head, and you meet the 3 tests listed above, then you will be able to count these costs as exempt. But you cannot do this if you’ve already used up the £150 exemption on another event. HMRC provides a useful example on this, which I’ve outlined below:
A company holds 2 annual dinner dances open to all its employees in the tax year. The total cost of the first, including transport and accommodation provided for certain guests, was £10,000 including VAT. The total number of persons attending was 100 and the cost per head was therefore £100.
The second dinner dance cost £8,000 including VAT, and 100 people attended this. The average cost was therefore £80.
The total cost per head for both functions was £180 so they cannot both qualify for exemption. Since the cost per head of each party on its own was not more than £150, either event can qualify for exemption on its own but it is more beneficial overall for the first to be exempted (since it cost more!). So the benefits arising from that function will not be charged and those arising from the second function will be charged!
Summary
It’s worth noting that your business will still get a business tax deduction for the cost of all parties and events, and you will be able to recover VAT in full regardless of the cost per employee, provided the purpose of the event is to reward good work or maintain and improve staff morale. The pitfall lies in the impact on the employee, and saving them from an unwelcome tax charge. Certainly some food for thought when you’re looking to wine and dine your employees for all of their hard work!
If you have any questions in relation to this article, please contact me or your usual Albert Goodman point of contact.
Thomas Lock
Business Services Assistant Manager
TAX CONSIDERATIONS OF WORKING REMOTELY FROM OVERSEAS
The wonders of modern technology and increasingly flexible working practices – especially since the Covid-19 pandemic – have led to a significant rise in the mobility of the global workforce, as employers strive to recruit and retain the best talent, and individuals seek the perfect work/life balance.
The rising popularity of ‘digital nomad’ visas are allowing individuals the opportunity to work remotely from overseas using technology to stay in touch with their employer or business, whilst enjoying the climate, lifestyle and culture offered by other regions. Countries that offer the opportunity to work in this way include Spain, Costa Rica, Barbados, Italy and Greece amongst many others.
But aside from the legal right to live and work in another country, there are potential tax implications for business owners and their employees from working overseas, which should be carefully considered.
Here we look at a couple of case studies which illustrate some of the considerations for UK workers who are logging on from sunnier climes.
Jack runs a consultancy business through a UK limited company and normally does this from his home in Somerset. His work is all undertaken online and he has no face-to-face meetings. As the weather hasn’t been great in the UK so far this year, he’s planning a trip to Spain for 3 months. What are the tax consequences of doing this?
Assuming he has no other significant absences from the UK during the year, Jack’s trip is not long enough for him to become non-resident for tax purposes in the UK.
As a UK tax resident, Jack will continue to be liable to UK income tax on his business income, whether drawn as salary or dividends, and will be subject to PAYE withholding via payroll.
Jack will need to take advice from a Spanish tax advisor to determine whether he is considered tax resident in Spain for the period that he is there. Other trips made to Spain in the year may be relevant in assessing this, as may be his home situation and other personal factors.
The UK/Spain Double Tax Agreement (also known as the ‘treaty’) will dictate whether any of Jack’s income is taxable in Spain, and if so, will be used to alleviate any double taxation between the UK and Spain.
Even if there is ultimately no tax payable in Spain, there may be employer registration, reporting and/or withholding tax obligations arising for the company, and Jack should discuss these with his Spanish advisor.
Jack will continue to be liable to National Insurance Contributions in respect of his income and the company will need to apply for a Form A1 from the UK NIC Office to certify his exemption from Spanish social security.
Although only in Spain for a short period, it is possible that there may be consequences under Spanish tax law for the limited company, as it will be managed and controlled from Spain whilst Jack lives there. A Spanish advisor will be able to comment further on the risks of this in practice.
Diane runs a marketing business and one of her employees has asked if they can work from home for 6 weeks over the school summer holidays. Diane knows the employee has children and she is happy to allow this request as she is confident that he will be able to complete his work as normal. She has however now ascertained that the employee is actually planning to spend the 6 week period abroad. What are the tax consequences of this for Diane as the employer and for the employee?
Diane’s employee is not leaving the UK for long enough to become non-resident, and as such his earnings will continue to be taxable in the UK. The payroll should therefore continue to be operated in the usual way.
Whether the employee creates a personal income tax exposure overseas depends upon the country in which they are staying. The UK has double tax agreements (treaties) with most foreign territories, but there are some notable exceptions (e.g. Brazil), and in the absence of a treaty the employee may be taxable on their earnings from workdays in that country from day one.
Even if he is exempt from income tax overseas under a treaty agreement, there may still be employer registration, reporting and/or withholding tax obligations arising for the company which could be effective from day one. Diane should take advice on this from an accountant in that country to ensure that the
company is compliant.
Diane’s employee will continue to be liable to National Insurance Contributions in respect of his income and Class 1 employer and employee deductions should continue. However, there is possible exposure to social security in the host country, and the action required to manage this will vary depending upon the country (whether in the EEA, a country with which the UK has a social security agreement, or another location). Diane should take advice on this to ensure that the correct paperwork is in place in this respect.
Depending on the level of seniority of the employee, there may be a corporate tax exposure in the host country. This is especially the case if the employee is concluding contracts on behalf of the company, and Diane should take advice in the overseas location on this point.
In practice, the risks to employers or business owners of tax or administrative compliance obligations arising from very short-term visits to foreign locations is relatively small. However, the longer the stay the greater these risks become. As soon as taxpayers spend 6 months overseas, they are almost certainly taxable there, and often this obligation will be triggered much sooner. It is always important – even with short trips - to take advice in the host country, if only to confirm that no further action is required.
Our tax team can connect you to advisors in most overseas locations via our global alliance (‘Praxity’) and are also on hand to guide you through the UK implications of any international moves that you or your employees may be planning – please don’t hesitate to get in touch to discuss these further.
Jackie Reeves Tax Senior Manager jackie.reeves@albertgoodman.co.uk
TEMPORARY EMPLOYEES – HOW TO MANAGE STAFF RESOURCES
Having extra help during your busy trading periods, such as during the summer season, can help your business stay flexible and meet demand but comes with complexities. This article covers some of the issues that need to be considered.
What is a temporary employee?
Temporary employees are hired on a fixed-term contract for an agreed period of time, either with an end date or upon completion of a specific project.
For example, this includes seasonal employees taken on for up to six months during a peak period, specialist employees or cover for maternity leave.
It doesn’t apply to those who have a contract with an agency (as they are likely to be an employee of the agency).
What are the benefits?
Meet the demands of your peak trading periods in your industry
Maintain high levels of service and customer expectations
Avoid being overstaffed in low season when demand drops
Support with staffing issues caused by sickness, holidays or maternity leave
What rights does a temporary employee have?
Temporary employees are entitled to the same working conditions and benefits as your permanent employees in comparable roles. For example, they should have the same rate of pay and holidays entitlement (pro-rated) unless you can justify any less favourable treatment on objective business grounds.
What should be in an employment contract for temporary staff?
Whether your employee is permanent or temporary, you should have a contract of employment in place. Legislation requires that any new hire be given a written statement of employment particulars by the date they start the job.
Are temporary employees entitled to any holiday entitlement?
Yes. All workers are entitled to a minimum of 5.6 weeks’ holiday per year, which equates to 28 days’ holiday a year for a full-time worker. Your temporary employee will accrue holidays on a pro-rata basis during their first year of employment.
Do you have to auto enrol temporary staff?
Your legal duties will still apply in respect to eligible jobholders.
You must offer temporary employees access to an occupational pension scheme however there are certain rules that mean you may be able to exclude a temporary worker from the pension scheme.
See our previous article on this Workplace Pensions for seasonal and temporary staff (albertgoodman.co.uk)
What if I do not know in advance how much work will be available for the employee?
Where you are unable to guarantee a minimum number of hours work per week for the temporary employee, you may wish to consider using a zero hours contract. This is a type of contract where the employee is not guaranteed a set number of hours by the employer. Staff on these contracts are only paid for the hours they work, giving the employer more flexibility during periods where there’s less work for them to do, or where the amount of work is unpredictable.
So, how do I hire the right seasonal staff?
Once you’ve checked all your legal obligations, there’s only one key element that you must remember when hiring temporary staff: choose carefully.
Just because you’re hiring staff on a temporary basis it doesn’t mean you should pick anyone who applies for the job. Do they have the skills and attributes you’d expect from your regular team?
It is always a good idea to try to hold interviews in advance of your busy season. Doing so means trial shifts can take place earlier, if necessary. You should bear in mind that where an individual is asked to carry out a ‘trial’, ‘test’ or ‘recruitment exercise’, the individual may nevertheless be a ‘worker’ and be entitled to the minimum wage during a trial shift.
Whilst Albert Goodman are not HR advisers, we do offer a payroll service and can help with your pension auto-enrolment duties. We also offer a Tax Investigation Service in conjunction with Croner-I and this offers clients who subscribe access to telephone and online support for HR, Legal and Health and Safety matters.
If you have any questions in relation to this article, please contact me or your usual Albert Goodman point of contact.
Sharron Quick Business Services Senior Manager
XERO PRICE INCREASES
Annual subscription price increases are nothing new; the most obvious being your mobile phone contract. Xero have also been doing this for a long while now. Each September the price you pay for your accounting software usually increases by £2 - £4 each month, about the price of a coffee.
From 12 September 2024, Xero is launching three new streamlined business plans (Xero Ignite, Xero Grow and Xero Comprehensive) and enhancing the Ultimate plan. The three new plans will replace the Starter, Standard and Premium plans which will no longer be sold from 12 September 2024.
For the users of core Xero, i.e., bookkeeping and VAT, very little changes: the revised lowest tier, Ignite plan, increases by £1 to £16/mo and the highest tier, Ultimate plan, increases by £4 to £59/mo.
Details of the new plans can be found here: New plans overview | Xero UK
Xero’s message is that the new simplified plans are designed to provide you with easier access to the tools to help run your business efficiently. That means fewer addons, as more key features are included in plans.
Whilst this is true, not being able to select the add-on you need to the plan that best fits the core business needs, but having to select the plan that contains the addon(s) you need and more that you don’t, you could end up paying disproportionately more on the new structure than the old structure.
The worst example:
You are a two-director business with less than 20 sales invoices a month, and you reconcile expenditure from the bank account rather than utilising the Bills to Pay features. Currently this costs you £15/mo for the Starter plan and £5/mo for Payroll. From 12 September 2024, you will need the Comprehensive plan at £47/mo to operate payroll for up to 5 people. This is a £27/mo or a 135% price increase.
Another common example:
You trade solely in the UK, thus have no multi-currency requirements, and employee 10 staff. Currently this costs you £30/mo for the Standard plan and £10/mo for Payroll. From 12 September 2024, you can only run payroll for 10 or more people in the Ultimate plan at £59/mo. This is a £19/mo or a 47.5% price increase.
The examples show the main businesses impacted are those using Xero Payroll. Xero Projects also moves from being a £5/mo per active user add-on, to only being available in the £59/m Ultimate plan. Albeit, this is for 10 users, which would cost £50/mo on the current billing.
This highlights how there will be winners and losers from the streamlining of plans.
Importantly, we are not recommending businesses move from Xero off the back of the pricing changes. For appropriate businesses, Xero is still our preferred accounting platform. We are also likely to see comparable price rises from QuickBooks and Sage.
With such a significant number of clients using Xero, and with multiple add-ons available, some of which are billed on active monthly users, we cannot give you your individually tailored price rise.
A full comparison with existing plans and addons can be found here: New_business_pricing_plans_ comparison_UK.pdf (xero.com)
If we hold the Xero subscription and disburse to you, a discount is applied to certain parts of your bill and will reduce the prices quoted above. If you are not already signed up to pay our invoices via GoCardless, for automated collection of these bills, please see your latest bill for details.
Darren Jasper Head of Outsourcing & Cloud darren.jasper@albertgoodman.co.uk