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COVID-19 Government Updates
Umbrella PAYE - Furlough - CRJS Update
The Coronavirus Job Retention Scheme, announced initially by the Treasury in March 2020 has been extended until 30th April in line with the latest lock down. The scheme 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 with the Government and Employer contributing up to 80% of the employee’s average gross pay.
NASA along with the majority of compliant Umbrella Companies operated the CJRS until the end of July/August 2020. From September 2020 the scheme changed and the employer – the umbrella company – was required to pick up the cost of the Employer NIC and Pension contributions for all furloughed workers. This was in addition to the Apprenticeship Levy and margin that had also been absorbed previously by the umbrella at significant cost.
Umbrella companies retain their employment costs and an admin margin to cover overheads from the contract rate agreed with an agency or end client. The revenue an umbrella company makes is solely from the administration Margin. For an umbrella company to therefore pay Employers NIC, Pension & Apprenticeship Levy for each furloughed worker, was sadly commercially impossible for the umbrella sector to operate.
NASA along with our industry body the FCSA have been lobbying Government continuously on behalf of our workers as we felt the changes to be unfair and to ignore the hundreds of thousands of workers who operate via an Umbrella Company in the UK.
In light of the latest lockdown position across the Home Countries, the CJRS whilst being extended until 30th April 2021 has been extended in its latest form without change to the level of contribution from the Government. As such it is with regret that we remain unable to operate the scheme. Should anything change we will of course be in touch, and continue to provide updates via this platform.
You will also find some helpful links further down this page relating to other support that may be available to you.
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.