“Changes to the ErNI
calculation are having a huge impact on both small to medium size companies.”
taken into consideration by the Government when tax and rules are reviewed. According to CleanLink’s data, before the recent changes to NI came into effect, the average percentage of employees attracting ErNI was 40%; this has risen to 80%. The number of staff now paying Employee NI (EeNI) has increased by 5%. These companies used to offer an income supplement to low earning families; now these families are caught in a benefits trap where they're penalised if they work too many hours.
This results in a perverse incentive structure where working more hours can lead to a loss in income. In effect, people are encouraged to limit their income to ensure they maintain access to crucial benefits like housing or childcare support. This in turn leads to a recruitment gap which is already a challenge in the industry, with reports that 30% of roles are currently unfilled.
Whilst this year is proving to be tough, Coastline Cleaning Services are anticipating more challenges next year with government changes to Statutory Sick Pay (SSP), which is already a cost that directly hits the bottom line.
Sylvie continued: “In our industry when someone is sick, we must service the contract by sending another employee. In term of charges, it means we pay SSP and then pay for the cleaning cover for the sick employee. In essence, we pay twice the cleaning hours to allow us to cover contracts and pay sick pay. It's easy to see how margins can quickly disappear if absences are not managed.”
With the current system, an employee must earn an average of £125 per week and be off sick for three days before receiving SSP. The government proposal for the new SSP rules is any employee could receive some level of SSP from day one. This would be another direct hit to the cleaning industry’s bottom line. SSP is already a big cost and as a
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business funded scheme, again it’s small and medium size businesses that carry the financial burden.
Only time will tell as to how the forthcoming revisions to SSP will impact UK industry, and in particular the UK cleaning industry.
To help manage their business effectively, Coastline has implemented the CleanLink software and are really appreciating the impact it has made to their management processes, particularly during challenging times. However, it’s the support from the CleanLink Customer Services team that has really made the difference. The depth of industry knowledge the team has is very strong, and they really understand HMRC regulations such as maternity, etc.
Sylvie explained: “It’s very important when you have issues there’s a team that knows how to find a solution. Regulations are often so complex and hard to understand that I have to call the CleanLink team and bounce back what the right calculations should be. It’s great to be able to check with them to ensure I’ve understood them correctly.
“It’s more than just software CleanLink are selling and being well trained on the processes is vital support, as calculations need to be right so that the business is operating legally – it’s invaluable peace of mind. CleanLink definitely go over and above with their support.”
As the business environment becomes ever more difficult, there is a need to ensure companies operate efficiently by making sure processes are managed effectively.
To find out more about how CleanLink could support your business, please contact themhere.
www.cleanlink.co.uk www.coastlinecleaning.co.uk
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