Anna’s Accountancy Alerts – Week 41 (10th – 16th January 2022)

Alternative employee workers at startup studio

Lending to your company

You can lend to your company and charge it interest. As long as you don’t overdo the interest rate your company can claim tax relief for this.  You’ll be taxed on the interest you receive but, taking account of corporation tax relief your company gets, extracting income from your company this way is more efficient than through dividends.

Employee expenses procedure up to scratch?

Your system must include checks on whether payments qualify for the tax and NI exemption. If so, they can be paid tax and NI free; if not, they must be put through your payroll as taxable earnings.  There’s no specific system you need to adopt but you must be able to show that payments you make tax and NI free meet HMRC’s conditions.

HMRC’s guidance booklets should provide all the information you need for checking if a payment is exempt or liable to PAYE tax and NI.  If not, contact HMRC.  Details of how to do this are included in the booklets.

Statutory Sick Pay next year

The standard three-day waiting time for Statutory Sick Pay (SSP) will be reinstated for coronavirus (COVID-19)-related claims from 25 March 2022, unless the government intervenes.

Under standard rules in the UK, employers do not have to pay SSP to an employee until the fourth qualifying day in the Period of Incapacity for Work (PIW). The PIW is a period of sickness lasting four or more consecutive calendar days, not all of which may be qualifying days.

Stay Up-To-Date With Coronavirus & Brexit News

Coronavirus has affected us all. Whether you’re a sole trader, employer or employee. Stay up to date with the latest news – including government support, tax implications, and more.