Businesses can choose which payroll system to use and it will help record employees’ details, work out employees’ pay and deductions, report payroll information to HMRC and calculate statutory pay, for example, maternity or sick pay.

Payroll is a complex, time-consuming part of your business and payroll errors, such as late or incorrect pay slips, are a sensitive topic that can cause a lot of tension between employees and their employer. It’s a service that Cypher offers clients and Clare Haynes, who heads up our Payroll Team has noticed, more and more, that one element of the payroll requirement is managed less well.

When we manage the Payroll for a member of staff who is leaving the business, often, when we come to calculate their annual leave allowance, we find it isn’t managed well or accurate.

Often, in a small business, with a limited HR function, this information will be kept on a spreadsheet as a manual process, which leads to inaccuracies. This means that when we are processing a leaver for example, it is difficult to identify what leave they have accrued, what they have taken and what they are owed.

To avoid this, with our clients, we use a piece of software called BrightHR. It is smart software that can help manage this potential minefield.

All employees and workers can have time off with pay, but the amount varies between full and part-time staff. Workers are entitled to a minimum of 5.6 weeks is 5 x 5.6 = 28 days. The 28 days includes the UK’s eight bank holidays.

For part-time staff, holidays should be calculated pro-rata and be representative of their typical working week, so if they work three days a week the calculation is 3 x 5.6 = 16.8 days of annual leave.

And it affects agency workers individuals with irregular hours, or those on zero-hour contracts. Plus your employment contracts might include additional terms covering annual leave, such as:

• Additional days off for all staff
• Additional days off linked to the individual employee’s role or length of service
• Payment in lieu for annual leave not taken
• Rules for taking and accruing contractual annual leave while off sick or on maternity leave. (Remember, employees always accrue statutory annual leave in these circumstances).

We think it is good business practice to work out as soon as possible what an employee is entitled to, so your workers know what they have available to them when they start their role.

Right now, holiday entitlement may seem a trivial concern, but by law you must get it right. BrightHR automatically calculates employee holiday entitlement, even the awkward calculations like when a new member of staff joins during the holiday year. All staff entitlements auto-refresh when your new holiday year begins and it handles booking mandatory leave easily. Your employees can request a holiday and you can sign it off in seconds—even if you are all working remotely.

With so many work patterns affected by the COVID pandemic, another useful tool from BrightHR, we find is the shift scheduling software which is great for shift and rota planning. It avoids piles of paper rotas littering the office, which are pretty useless if colleagues aren’t even in the building. Everything you need is in one place in the people management hub.

Finally, for clients with multiple locations BrightHR also has a function that helps to easily track your employees’ work hours and locations. We know that whether your team is working from home or they’re back in the office, it’s difficult to stay on top of all of their hours. To make it easier, the software can create a clever ‘geofence’, which is a sort of virtual boundary around your chosen workplace. Then, when your employees enter or leave the ‘geofence’, it picks up their location and asks them to clock in or out—helping you to see exactly when your staff have worked and how long for. It means that employees clock in properly and keep track of their hours, so you pay for their allocated time and they get credit for the hours worked, wherever and whenever that is.

January is a very busy month for accountants, but it could get busier in the next few weeks. As the deadline looms for self-assessment tax returns at the end of January, HMRC reported earlier this month that nearly half of those due to file a return hadn’t done so.

As of January 4^th, HMRC had received 6.6m of the total 12.1m expected self-assessment tax returns due to be filed before the January 31^st deadline.

Due to the various lockdowns we have experienced since March, many people are still struggling to gather the data that they need – often from third parties to file these returns. However, as things presently stand, if you are not able to finalise your tax returns by the end of this month, you would be subject to automatic late filing penalties – even if there is no tax due.

VAT

In addition to the self-assessment payments, Government figures suggest that some £30bn of VAT payments were also deferred this year.

Up to half a million businesses are thought to have taken advantage of the COVID-19 VAT payment deferral scheme, which allowed them to defer VAT payments falling due between 20 March 2020 and 30 June 2020 until 31 March 2021. HMRC has recently issued guidance on the process of extending the deferral by a year to the end of March 2022.

Businesses choosing this route will need to opt-in to the scheme, and for those who do, this means that your VAT liabilities due between 20 March and 30 June 2020 can be split into smaller, interest free payments over the course of 11 months until March 31st 2022. Of course, those that can pay their deferred VAT can still do so by 31 March 2021.

The scheme will allow organisations to pay their deferred VAT in instalments without incurring interest charges and select the number of instalments from 2 to 11 equal monthly payments. To use it organisations must still have deferred VAT to pay, be up to date with VAT return declarations and be able to pay the deferred VAT by Direct Debit.

Time to Pay Arrangements

As well as deferring VAT payments, HMRC has allowed business owners to defer their Corporation Tax bills. For many, largely due to COVID, this was a chunk of money they don’t have. Paying out a large sum, in one go, could jeopardise cash flow so many have sought to put this off. If you are still unable to pay the VAT or Corporation Tax due and need more time, you can apply to HMRC for a Time to Pay Arrangement.

HMRC Time to Pay Arrangements (TTP) are structured payment plans for debt repayment over an agreed time period. Be aware that HMRC does not give these out lightly, but equally they do recognise that in certain circumstances businesses need help. In light of the impact that the Coronavirus (COVID-19) pandemic has had on so many businesses, across all industries, they may well be more permissive than ever as the Government recognises that it must does everything it can to help businesses through these challenging times.

HMRC has even set up a helpline for business owners, ready to offer advice and support. Usually, these TTP agreements come with a 3.5% penalty charge but, according to Chancellor Rishi Sunak’s autumn budget statement, this will be waived for the duration of the virus.

If you concerned about not being able to pay HMRC, speak to your accountant or make this number a first port of call.

HMRC Coronavirus Helpline: 0800 015 9559, Monday to Friday, 8am to 8pm, Saturday, 8am to 4pm

As the UK experiences another nationwide lockdown, it’s important that as a business- and a sector- we learn our lessons from 2020 and adapt accordingly. Since March we have tried to ensure that business owners know their options, understand the support that is on offer and that we are available for them. The whole point of offering a ‘you can get hold of us anytime service’ is that clients can actually get hold of us.

And one topic that’s constantly on entrepreneurs’ minds is funding. It is something we are asked about a lot.

Developing a great business takes commitment, diligence, patience and in most cases, a good deal of money. Navigating the tricky waters of patenting your IP, and establishing your market can be expensive and finding and securing the financial resources that will allow you to focus on business growth is critical.

That is why we are delighted to work with Quick Start Consulting. We met as part of the Kickstarter programme and were referred to Hannah and her team.

Along with the other 84,757, Quick Start (QS) Consulting was also founded at the start of 2020 and is on a mission to help start-ups and early-growth stage businesses raise capital without having to give up their equity, or move too quickly for VC or Angel investment. They have significant experience of navigating the grant funding ecosystem and can effectively fill the skills gap so often found in start-ups of how to find and convert equity-free fundraising to accelerate early-stage R&D.

They specialise in helping SME businesses in the innovation, technology, sustainability, health and engineering sectors grow. They are good too, with a recent 96% success rate in Q4 of 2020. Their average grant funds come in at around £300,000 for a 12 month funding period. So whether it is a funding stream, a consortium of backers or growth partners your business needs, they can deliver a solution.

With more than 250 grants available, which change almost every week, ranging from £100,000 to £2.5m part of what QS offers is a level of upfront labour-intensive wrap around support upfront to get your project funded. They specialise in open brief funds which are for any innovation in any sector and give tailored advice on closed-brief, industry-specific grants, meaning they target their approach to find the funds designed specifically for your industry. They can spot the low hanging fruit and this level of due diligence means they can advise business owners accurately of their suitability for grants.

They work with clients across the UK, Europe and the US, matching clients with government funding, trusts and foundations, European funding, NIHR, accelerators and ITTs. If you have a new App, a design for new type of electric vehicle or medical device, then Quick Start Consulting are particularly interested in technology that disrupts industry, creates a new paradigm for thinking, prioritises sustainability or accelerates environmental innovation.

Does this sound like your business idea for 2021?

Of course, having a letter of intent from a retailer or manufacturer to validate your business idea is a wonderful position to be in. At Cypher, we work with a number of innovative businesses in the Oxfordshire area, but if you have a patent or an innovation that is protectable, or a product that is technically disruptive or unique, or you have great experience within the sector you are trying to penetrate, then Quick Start Consulting could be a great introduction for you.