March 2020

Prevention of Coronavirus Disease COVID-19. Dad splashes on his daughter's arms hand sanitizer.

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Lack Of Detailed Guidance On:

The Self-employment income scheme – this was issued on 27/03/20 but does not have the level of detail that HMRC guidance would normally have or examples to provide clarity.

The Job retention scheme – this was announced on 20/3/20.  Legislation was due on 27/03/20 but is not yet available.

Limited Company Directors Have Limited Support

This includes contractors, consultants and other off payroll workers who provide their services to an organisation via a company.

Usually the director pays themselves a small amount in PAYE salary, drawing the rest as dividends from the company.

They won’t be covered by the self-employed income support scheme

Directors of limited companies are, in some cases, eligible to make a claim under the coronavirus job retention scheme.

Rules:

Employees can rotate around periods of furlough and work, provided that each period of furlough lasts for a minimum of three weeks.

Directors can be furloughed as long as they’re an employee on PAYE and on the payroll on 28 February 2020.

The entitlement is 80% of basic pay

Employees can’t do any work for the business during furlough.

Dividends are not covered by the job retention scheme or the self-employed scheme.

IR35 Challenge

Andy Chamberlain, director of policy and external affairs at contractors’ trade body IPSE, said: ‘We are certainly disappointed that many of our members and other contractors who operate via a limited company will miss out on the level of support available to other self-employed workers.

‘We are frustrated with the lack of wider support for those who choose, or are sometimes simply required, to work in this way beyond loans and tax deferrals.

‘But there is, however, one silver lining. The exclusion of contractors from the scheme highlights that we are right in our cause against IR35. How can the government justify treating contractors as “employees for tax purposes” when they’re carved out of support at this critical time?

Job Retention Scheme To Pay Employer NICs And Employer Auto Enrolment Costs

 

Annual Leave Rules Relaxed

Currently, almost all workers are entitled to 28 days holiday including bank holidays each year. However, most of this entitlement cannot be carried between leave years, meaning workers lose their holiday if they do not take it.

The changes to the regulations will allow up to four weeks of unused leave to be carried into the next two leave years, easing the requirements on business to ensure that workers take statutory amount of annual leave in any one year.

COVID-19: Insolvency Rules Relaxed

The government has announced changes to the insolvency regulations during the coronavirus pandemic to enable UK companies undergoing a rescue or restructure process to continue trading, with the aim of giving them breathing space.