Anna’s Accountancy Alerts – Week 45 (8th – 14th February 2021)

UK Small Business

Wrongful Trading Rules Suspended Again

They were previously suspended until 30 September 2020. They were suspended on 26 November 2020 until 30 April 2021. but remember the rules were active between 30 September and 26 November 2020.

Wrongful trading occurs when a business continues to trade in the knowledge that it is unable to meet its debts and liabilities. Directors can be held personally liable for the company’s debts where they permit wrongful trading.

Best to keep a close eye on the company’s trading and financial position and ensure it can meet its liabilities on 1 May 2021.

Where a company is in danger of moving into the wrongful trading zone, the directors owe their primary duty to the company’s creditors, not to its shareholders.

This means debts should be settled before any dividends are paid out. Where a dividend is paid in preference to a debt, it can be recovered from the director personally.

Student Loans And Off-Payroll Workers

From April 2021 where you include a worker on your payroll because the new IR35 rules apply, you aren’t required to make deductions for student loans. It’s up to them to make any payments through their payroll if necessary.

Fee-payer responsibilities under the off-payroll working rules – GOV.UK (www.gov.uk)

Intern Opportunity?

There are plenty of young people on the market and you need an extra member of staff as business has started to pick up. What might you save by bringing an intern on board?

What’s An Intern?

There’s no legal definition of the term, but basically, it amounts to work experience. The intern spends a specified period of time in your business gaining experience. The business benefit is that you have access to new talent.

Unless their activities are predominantly confined to: (1) shadowing employees; (2) asking questions; and (3) generally observing your workplace, they will be classed as a “worker” and therefore entitled to receive the appropriate national minimum wage (NMW) rate.

HMRC is clamping down on the exploitation of interns. Last year it wrote to more than 2,000 businesses who were advertising for “unpaid internships” to make the law clear. Guidance is available on GOV.UK

Employment rights and pay for interns – GOV.UK (www.gov.uk)

Students of compulsory school age and those required to undertake an internship for less than one year as part of a UK-based further or higher education course aren’t entitled to receive the NMW.

Try to choose an intern that has had some work experience and assign one of your

Interns will often need guidance but can be a useful part of the workforce, particularly during busy periods or for labour-intensive tasks.

They need to be paid fairly but will probably be cheaper than a new full-time recruit.

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