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COVID-19 Government Updates
03/06/2020 - Update
Umbrella PAYE - Furlough - Coronavirus Job Retention Scheme
The above scheme, announced by the Treasury in March, is designed to safeguard jobs that due to COVID-19 would have been made redundant. Instead the worker is placed on a ‘Furlough’ by the employer and the government has stated that they will cover up to 80% of a workers regular wage.
In the case of contractors this means furlough will apply if an assignment is being terminated early or paused as work sites close or as work is no longer available, or where someone is shielding as high risk - rather than being made redundant.
Umbrella employment contracts cover various assignments in which the pay rate generally varies. To allow this flexibility payments are split into a Minimum Wage salary with the remainder paid as a commission or bonus. There was considerable concern that HMRCs guidance did not allow for umbrella companies to pay workers based on average pay and include the commission element – contractually a discretionary item. The high financial risk to the umbrella sector being HMRC not honouring furlough payments following future audits into the scheme.
We’ve been working tirelessly with our sector, industry body (FCSA) and our advisors to get clarity from HMRC for over 6 weeks. We’re happy to announce that as of 07/05/2020, HMRC have finally released clarification via the FCSA, that umbrella companies can pay workers at 80% of their regular pay. This long-awaited confirmation means we can apply what we feel is only fair – that our workers receive 80% of their average taxable pay.
If you have been furloughed meet the conditions and have not been in contact already, we urge you to contact NASA as below as soon as possible.
HMRCs current guidance advises the following
Workers who will not qualify for the scheme
The government has advised the following points about eligibility:
Workers need to have been on the payroll of their employer before 19th March 2020. If you have not been paid by NASA prior to or on 19th March 2020, you will sadly not be eligible
Those who are continuing to work on their assignments (either as key workers or remote working)
Anyone whose furlough is expected to be less than 3 weeks (between going on furlough and the natural end of the assignment)
Anyone whose assignment is in the Public Sector and is receiving a Coronavirus payment (PPN 02/20) via their agency @ 80% of their pay rate
Anyone whose furlough date is after 10/06/2020 - See bottom of page for more details
Workers who may qualify for the scheme
Workers who were working on an ongoing assignment with NASA and paid before 19th March 2020 may progress an application if one of the below scenarios apply:
As above, the government have advised us that we can only claim for furloughed employees that were employed on 19 March 2020 and who were on PAYE payroll on or before 19 March 2020. This means an RTI submission notifying payment in respect of that employee to HMRC must have been made on or before 19 March 2020.
In line with updates from the treasury as of 29th May 2020:
The CJRS Scheme will close for new entrants on 30th June 2020
This means the final date by which an employer can furlough an employee for the first time will be 10th June 2020 in order for the three week furlough to have been completed by the 30th June 2020.
Unfortunately if you had not agreed your furlough with us by this date, or if your furlough started after this date, we will not be able to make an application for you
You can read the full update via the Government website here:
We request that if you match one of the above scenarios you email our payroll team:
We will then contact you with next steps should you be eligible.
Central Government – contingent worker payments
The cabinet office has issued guidance relating to ongoing payments to workers in central government for those workers affected by COVID-19, who are unable to work from home, there is no work available (office closure for example) or are either sick or shielding. The expectation is that Central Government departments will implement the guidance, and the remainder of the public sector have been advised to do the same. Workers will not need to be furloughed as with the CJRS above, and the process will work as presently with timesheets being completed and payments being made by your umbrella of 80% of your pay rate, up to a maximum of £2,500 per month.
If you work in the public sector and are unable to work due to the reasons above, we’d recommend that you speak to your agency or end client to confirm if your end client is implementing the scheme.
Ongoing support for Coronavirus
Our teams are incredibly busy at the moment working to support our contractors and agency partners alike. We are also experiencing a very high volume of calls relating to Coronavirus and the Job Retention Scheme specifically. As such we have set up this web page to provide the most up-to-date information on Coronavirus and the support available to you. We continue to update the page as further information is released.
For any Coronavirus or Job Retention Scheme related queries, we request that you check back to this page first. If you still have a query after checking this page, please email it to email@example.com. NASA customer service staff will direct any callers to this webpage as the most up to date source of information - they will have no additional details or information on this.
CIS / Self-Employed
If you are CIS Self-employed, you may be entitled to self-employed funds but this would be claimed and processed via HMRC directly .
As per their guidance they are looking to contact people directly, and you can find more information here.
If you’ve not filed an 18/19 personal tax return you have four weeks to do so in order to qualify .
Your self-employed trading profits must also be less than £50,000 and more than half of your income must have come from self-employment.
PSC / Limited Company Contractors
Coronavirus Job Retention Scheme (CJRS)
This is going to be available for Ltd company contractors who have been adversely affected by COVID 19 and subsequently lost their end client contracts. We anticipate these contractors to be able to furlough themselves (placed on a leave of absence) and therefore claim up to 80% of their gross monthly salary. The rules specifically do not allow you to include your dividends in this, as dividends are a reward for business performance, whereas this scheme is to support you as a worker in the company for the salary element of your earnings.
Self-Employed Income Support Scheme (SEISS)
This will sadly not be available for Ltd company contractors as they are not self-employed, but are employed by their personal service company. The Government has stated that “Those who pay themselves a salary and dividends through their own company are not covered by the scheme but will be covered for their salary by the Coronavirus Job Retention Scheme if they are operating PAYE schemes.”
Other potential support
We're aware that not all workers will be affected in the same way, or will fall into the rules set our by the government - so there may be additional support available for you depending on your circumstances. We've listed a few of these here:
Mortgage Payment Holidays
Many lenders are looking to implement payment holidays or breaks for customers who may be struggling during this time, in order to ease the financial burden of running their home with a lower, or even no income.
A payment holiday means it is agreed with your mortgage lender that you will not have to make mortgage payments for a set amount of time. Lenders are offering different options including extending loans, increasing payments after the payment holiday has ended, or requesting lump sums. It is important that you speak to your lender directly to get the best advice, and details on what may be possible for you depending on your own individual circumstances.
You can find out more from FCA here on the definitions, and things to consider surrounding payment holidays.
Local Housing Allowance and Universal Credit
Local Housing Allowance (LHA) is used to work out how much Housing Benefit the government can pay for private tenants to rent their homes. As part of the government covid-19 bailout, they have announced that from 1 April 2020 Local Housing Allowance figures will increase to cover at least 30 per cent of market rent in the specified area, to ensure renters are still able to secure homes.
In addition to this, The Universal Credit Standard Allowance was boosted by £1,000 for the next 12 months with Working Tax Credits increased by the same amount. The minimum income floor for Universal Credit was suspended for anyone impacted by coronavirus, meaning it can be claimed by any self-employed person out of work at a rate equivalent to statutory sick pay.
Please check your local government’s website for more information on how LHA this may affect you. More details on Universal Credit and how to go about claiming can be found here: https://www.gov.uk/universal-credit
Bank Overdrafts and Interest – accounts up to £500 to be charged no interest
The financial conduct authority has proposed banks apply a blanket zero-interest buffer to a maximum of £500 on all agreed overdrafts for 3 months. Many banks are already following this recommendation (including Lloyds and Barclays, depending on the type of account you hold) with others looking to follow suit shortly. Your bank or building society’s website will have more information on whether this is applicable to you based on the accounts you hold with them.
HMRC “Time to Pay”
HMRC are putting several measures in place to support both employed and self-employed individuals. If you are struggling to meet a tax payment on time, you can contact HMRC who in turn may then be able to defer or spread your payments. It is important to keep in mind that this will not reduce the overall amount that you or your business owes, but can help with cash flow in the short term.
You can find more information here via the HMRC website, including the relevant phone numbers to call: https://www.gov.uk/difficulties-paying-hmrc
Self-assessment – Deferral of payment on account due 31st July 2020 moved to 31st Jan 2021
The deadlines for paying your self-assessment tax bill are usually:
31 January - for any tax you owe for the previous tax year (known as a balancing payment) and your first payment on account
31 July for your second payment on account
Due to coronavirus (COVID-19), you can delay making your second payment on account. If you choose to delay, you’ll have until 31 January 2021 to pay it.
More Information here: https://www.gov.uk/pay-self-assessment-tax-bill
If you’re a UK VAT registered business and have a VAT payment due between 20 March 2020 and 30 June 2020, you have the option to:
defer the payment until a later date
pay the VAT due as normal
HMRC will not charge interest or penalties on any amount deferred as a result of the Chancellor’s announcement. You will still need to submit your VAT returns to HMRC on time.
More Information here: https://www.gov.uk/guidance/deferral-of-vat-payments-due-to-coronavirus-covid-19
Repayments on Credit Agreements
Some lenders are offering payment holidays on credit cards, loans and store cards. For some, this also includes long term payments such as car leases. You will need to contact your bank or lender directly to see if they are running such schemes, typically larger providers have already got useful information up on their website to help their customers. The majority of information suggests you may be able to obtain a break of us to 3 months although this is likely to vary across different providers.
You can find out more from the government website here: https://www.gov.uk/coronavirus
This page was last updated on: 7th May 2020
As more information is released from the government, we'll update this page to reflect any changes.