Ordinarily, the cash reimbursement of a test by an employer to an employee would be classed as earnings and so would be subject to tax and NI. This measure, however, will ensure that employees can access a coronavirus swab test for business reasons, such as the requirement to hold a negative test result to travel abroad for business, without any tax and NI liabilities arising. A policy paper was released by HMRC to confirm the temporary exemption, and the measure will have effect from 25 January 2021 up until 5 April 2021.For any relevant advance payments or reimbursements made within tax year 2020- 21, but prior to the measure coming into force, HMRC will refrain from collecting any NI or tax due on the reimbursement of a relevant coronavirus antigen test.
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Covid-19 Test and Trace Support payments exempt from National Insurance contributions for Scotland and Wales 18 December 2020 HMRC has released a policy paper, which explains that the Self-Isolation Support Grant in Scotland and the Self- Isolation Support Payment in Wales will be exempt from both employer and employee Class 1 National Insurance (NI) contributions, and Class 1A NI contributions. The schemes have been launched in order to assist those employees receiving low incomes, who have been asked to self-isolate by either the Test and Protect Service in Scotland or the NHS Wales, Test, Trace, Protect service in Wales, where they cannot work from home and subsequently, would suffer financial consequences as a result of staying at home.
Those who qualify are entitled to a one-off payment of £500 for the time that they spend in self-isolation.
Payments made under the schemes are classified as earnings and so would ordinarily be subject to employee and employer Class 1 NI contributions, meaning that local authorities would need to consider and possibly deduct the value of employee NI contributions from any payments that are made. The employer would also be required to deduct Class 1 NI contributions on the gross pay figure. This places a cost burden on the local authorities who administer the scheme and also on employers of employees who receive the grants. Therefore, the measure has been implemented to prevent these administrative costs from arising. The Social Security Contributions (Disregarded Payments) (Coronavirus) (Scotland and Wales) Regulations 2020 introduce a Class 1 and 1A NI contributions exemption for payments made under this scheme. They were laid before Parliament on 15 December 2020 and come into effect from 5 January 2021.
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New lockdown grants available to support businesses and protect jobs 5 January 2021
The Chancellor has announced that one-off top up grants for retail, hospitality, and leisure businesses worth up to £9,000 per property to help businesses through to the Spring will be made available.
The £594 million discretionary fund will also be made available to support other impacted businesses. It comes in addition to the £1.1 billion grant funding for Local Authorities, Local Restriction Support Grants worth up to £3,000 a month, as well as the extension of the furlough scheme to the end of April. This follows the Prime Minister’s announcement last night that these businesses will be closed until at least February half-term to help control the virus, and, together with the wide range of existing support, will provide them with certainty through the Spring period.
The Chartered Institute of Payroll Professionals
Payroll: need to know
cipp.org.uk
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