Welcome to the February 2020 'Need to Know' update. You'll find the latest key information on Migration wage threshold, Brexit, the NIC threshold, new bereavement law, and a warning on rogue energy brokers
NIC break targets small businesses
From April, changes to the employment allowance will encourage smaller businesses to use a new tax break to reduce their NICs' bill
The government has revised the rules on the £3,000 employment allowance, with effect from 6 April 2020, removing the requirement for employers to provide information about other de minimis state aid they have received or been allocated.
In future, employers will have to claim the employment allowance every year in order receive the relief as it will no longer be carried forward from one tax year to the next.
This reform, first announced at Budget 2018, is designed to target the employment allowance at the original intended beneficiaries: smaller businesses, excluding single director companies, giving them a tax break on Class 2 National Insurance contributions (NICs).
The tax relief will no longer be available to larger employers who incur employer secondary Class 1 NICs’ liabilities of £100,000 or more in the tax year immediately before the year of claim, as well as employers who are connected to other employers where their cumulative secondary Class 1 NICs liability is £100,000 or more.
You can read more here: http://bit.ly/2RIIJO9
How FSB can support your business following UK exit from EU
The United Kingdom has formally left the European Union, following ratification of an Act of Parliament on January 31.
A range of uncertainties still exist as the UK now enters a period of negotiation to establish the exact relationship we will have with the EU. For small business owners this means much uncertainty still exists and will do so for most of 2020.
FSB will therefore be maintaining its Brexit advice, podcasts and updates throughout the year to help all small business owners.
The FSB small business hub can be found at:
A podcast discussing Brexit can be found here:
First Voice magazine also has a Brexit hub which can be found here: https://firstvoice.fsb.org.uk/first-voice/topic/brexit
Small businesses make voice heard on £30,000 threshold for international talent
The Government should drop the salary threshold for immigrants by more than £4,000, a committee has advised.
Skilled migrants from outside the EU currently need to have a job offer with a minimum salary of £30,000.
But the Migration Advisory Committee (MAC) said it should fall to £25,600 for all workers to help recruit teachers and skilled NHS staff.
Mike Cherry, National Chairman of the Federation of Small Businesses (FSB) said: “The recommendation to lower the proposed minimum salary threshold to £25,600 is a welcome, pro-business proposal, which would widen the scope for employing those beyond highly-paid professions.
“It is vital that the workers and skills needed for the UK’s economy to grow are not locked out by a future immigration system which is unresponsive to business needs.
“One in five small employers in the UK have at least one staff member from the EU.”
You can read more here: http://bit.ly/3aVRZWA
New bereavement rules to help grieving parents
Parents who suffer the devastating loss of a child will be entitled to two weeks’ statutory leave, Business Secretary Andrea Leadsom announced as she laid new regulations in Parliament.
The Parental Bereavement Leave and Pay Regulations, which will be known as Jack’s Law in memory of Jack Herd whose mother Lucy campaigned tirelessly on the issue, will implement a statutory right to a minimum of two weeks’ leave for all employed parents if they lose a child under the age of 18, or suffer a stillbirth from 24 weeks of pregnancy, irrespective of how long they have worked for their employer.
This is set to take effect from April.
Parents will be able to take the leave as either a single block of 2 weeks, or as 2 separate blocks of one week each taken at different times across the first year after their child’s death. This means they can match their leave to the times they need it most, which could be in the early days or over the first anniversary.
Federation of Small Businesses (FSB) National Chairman Mike Cherry said: “This first step towards making statutory leave a reality for those facing the tragic loss of a child is vital. Anyone suffering such terrible circumstances should have the full support of their employer and time away from the workplace.
“We’ve engaged with the Government to ensure Jack’s Law works for both employees and small businesses – making it a day one right as it absolutely should be.
“It would be fantastic to see this legislation improved even further with the creation of a parental bereavement allowance for the self-employed.
“Now numbering more than five million for the first time, our sole traders drive the economy forward – and if the worst happens to them and their families, they should also get some compassionate assistance.”
You can read more here: http://bit.ly/315AD4W
Rogue energy brokers con SMEs out of £2bn
Small businesses are being conned out of £2bn by rogue energy brokers, who lock them into long-term bad-value gas and electricity contracts, according to documents submitted to the energy regulator Ofgem.
The report claims rogue energy market brokers promise the best energy deal for small businesses at no charge to their client, but go on to offer poor-value deals picked exclusively from suppliers that offer the most lucrative terms for the brokers.
Ofgem plans to launch a call for evidence in the next few months to determine the extent of the mis-selling problem in the energy market.
You can read more about Ofgem’s plans here; http://bit.ly/31dP3A7