- The coronavirus job retention scheme
has been extended to the 30th of September, 2021.
So as a limited company business owner
who paid themselves a PAYE salary,
you have an extended period in which to make any claims.
In this video, we will cover the main changes
to the furlough scheme in 2021.
A limited company director furlough claim
if you pay yourself a PAYE salary, and finally,
a quick word on HMRC investigations and COVID scheme fraud.
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The government in 2021
will continue to pay furloughed employees
up to 80% of their wages,
up to a cap of £2,500 per month.
From July, 2021 this will go down to 70%
with 10% payable by the employer,
and then down to 60% in August, 2021,
with 20% falling on the employer.
This is most likely to coincide
with the easing of lockdown
and the UK government hoping that more and more employees
will return back to work.
Before we continue with today's video,
we're thrilled to be launching the Accounting & Tax Academy
membership site this year.
We'll be posting downloadable resources, tax tutorials
and exclusive courses that you won't find anywhere else.
And the best part of it is it's absolutely free to join.
Head to the link in the description box below
to find out more.
If you are a small limited company director shareholder
who is paying themselves an obstacle salary,
then let's go through an example
as to what your furlough claim could look like
if you're claiming for the 2122 tax year
using the figures just published for the UK budget in 2021.
We have done a comprehensive video on the UK budget, 2021
and how you can pay yourself tax optimally
as a director in the 2122 tax year.
We've also published a downloadable guide
which you can access by clicking on the link above.
So let's assume you pay yourself a director salary
up to the new 2122 personal allowance threshold
of £12,570 per annum
which equals £1,047.50 per month.
If you want to make a furlough claim for May 21 and June 21,
you can do so, and you will receive government support
of 80% of this amount,
which is £838 for each of these months.
At this level of annual director's salary
there will be no employer's national insurance
during the period May 21 to September 21 inclusive,
regardless of whether you qualify
for the employer's national insurance allowance,
simply because national insurance
for directors is calculated on an annual basis.
Any Class 1 employer's national insurance due
on this level of salary only becomes due
in the last three months of the tax year.
That is January, February, and March.
And that is assuming your limited company does not qualify
for the national insurance allowance.
And the furlough scheme is actually scheduled to end
on the 30th of September, 2021 anyhow.
If you are making any pension contributions
on behalf of yourself, the director or other directors,
then this obligation remains with you or your company
depending on who is making the contributions.
The government does not provide any support for this.
July, 2021 the amount that the government will contribute
will start to decrease, and your claim will be £733.25,
that's 70% of your director salary.
In order to qualify for this, your company has to top up
the remaining 10% of £104.75, giving a total of £838.
Finally, for the final two months of August and September,
the government will only contribute
up to 60% of your salary.
So, as you can see on screen,
your company will gradually bear 20% of your salary.
And on the final note,
whilst we don't want you to have any sleepless nights,
we do urge you to double-check your historic,
as well as any present furlough claims,
as HMRC have recently announced a 100 million
COVID fraud task force, which will hope to recover
as much of the reported 3.5 billion
of COVID related fraud that has unfortunately occurred.
If you have made genuine and innocent errors
or overclaimed unintentionally, then head to the link
in the description box below,
where you can find out more about
possibly making amends.
I hope this video has helped you understand the 2021 changes
to the job retention scheme and taking you one step closer
to knowing your numbers.
As always, let us know in the comments
your thoughts on today's video
or if there are any topics
you'd like us to cover in the future.
Finally, be sure to like and subscribe
as this really does help us get our content out there.
This is Tony Dhanjal for the Accounting & Tax Academy.
Thanks for tuning in.
(soft relaxing music)