Month: March 2020

Chancellor Rishi Sunak has announced unprecedented measures to support self employed people who are struggling to retain work claiming “you have not been forgotten” in a Self Employed Income Support Scheme.

He believes the government has provided a “coherent, co-ordinated and competent plan” however also stressed that this has been “difficult to do in practice”.

Initial details are;

* Taxable grants will be available to the value of 80% average profits from up to the last 3 years (depending on length of time trading) up to the value of £2500 per month for initially 3 months.

* Grants will be paid directly whilst people can carry on with self employed work and should be available by June.

* The scheme is available to anyone with average profits of up to £50K per year where their self employed profits make up more than 50% of their overall income.

* To qualify you must have made a self assessment tax return for 2019 – those who have not yet submitted have 4 weeks to do so.

* If you qualify you will be contacted by HMRC with forms to complete to receive this grant.

* This should support 95% of self employed people but if you still do not qualify for this grant you can apply for Business Interruption Loans and Universal Credit in full

A leaked report has provided some clarity on how the Furlough at 80% salary scheme could work. Although unconfirmed at this time they include;

* The scheme will initially be available for 3 months and will be up and running by the end of April

* The grants will be made through HMRC and are eligible for all PAYE employees irrespective of their contract terms

* An employee must be Furloughed for a minimum of 3 weeks to qualify

* Earnings will be calculated by the higher of 1) the earnings in the same pay period last year or 2) the average earning of the last 12 months (or the length of employment if less than 1 year) up to £2500 per month.

* Payments can be back dated to the 1st March 2020 but only when an employee has been Furloughed and has not carried out any work

* Employer pension and NI contributions will be included in the grant

* Employees who were made redundant after 1st March 2020 can be rehired (paying back any redundancy pay) and put onto a Furloughed contract immediately

* Employees who have started with a company after the 1st March 2020 do not qualify for this scheme

* Payments will be subject to Tax and NI

* Those on reduced hours can not be included in the scheme until they are full Furloughed

* An employer can top this payment up to any of the remaining part of an employees salary if they wish

The government have now debated an amendment to the coronavirus bill which will include relief for the self employed.

It is hoped that, should it pass, self employed and freelancers could claim either 80% of their average monthly earnings based on the last 3 years of tax returns or £2,917 whichever is lower.

It is believed that this is being rushed through but as yet there has been no date of when this could become available.

https://publications.parliament.uk/pa/bills/cbill/58-01/0122/amend/coronavirus_daily_cwh_0320rev.14-18.html?fbclid=IwAR1mWJSoIC818NZ_MOw1HtF89lkQpIQwPoPbJ1LciSueZKLXbZA9jyIg6NU

On Friday, The Chancellor, Rishi Sunak, announced an unprecedented support package for business to furlough employees on 80% of their salary. Unfortunately he did not go as far as protecting income for the self employed however, there are unconfirmed rumours of an announcement on this at 5pm today (23.03.2020).

Not much is clear as yet of the logistics of these plans but I have put together all the information I can at this time.

What is furlough?
Rather than lay-off an employee (with or without pay) or make anyone redundant there is now an emergency measure to furlough an employee, continue to pay their wages and claim 80% back up to the value of £2500 per month per employee through HMRC. Essentially you can stay at home and be paid but your employer will decide if they can afford to top up your remaining 20%. As yet the systems are not up and running for how this will be processed but the link below will be updated in time. Employers should look to make an application as soon as possible and short term relief loans are being made available. It is highly unlikely that employment contracts will have a furlough clause in them so employers should write to all employees they are asking to stay at home with an extraordinary measures temporary adjustment to their contract.

Can you claim if you have a zero hours contract?
Yes but how that average salary is calculated is still unclear. As this system is coming through HMRC, it is based on your PAYE submissions. It is also unclear on how those working more than one zero hour job will have their average salary calculated. Those paid cash in hand will not be able to claim.

Can I do any other work if I am furloughed?
This is very unclear. If you currently work more than one zero hours contract and only one has put you on furlough then, in theory, they will claim 80% of that salary only (however that calculation will be made) and you will continue to work in your other role. However, it will be very difficult to know what will happen if you become available to work more hours at another job. Until this is clarified, there could be abuse of this system that could lead to consequences for those individuals.

Can I apply for this if I am self employed?
Unfortunately no, there is no support allowance based on self assessment tax so currently the only support available is via ESA and Universal Credit. If announcements are made as predicted, I will send updates as soon as possible.

https://www.gov.uk/government/publications/guidance-to-employers-and-businesses-about-covid-19/covid-19-support-for-businesses#support-for-businesses-through-the-coronavirus-job-retention-scheme

The NHS has just launched online isolation notes for those needing fit notes from the doctor for employees, and now employers, to claim SSP for those advised to stay away from work for more than 7 days.

More info…. https://www.gov.uk/government/news/online-isolation-notes-launched-providing-proof-of-coronavirus-absence-from-work

In these unprecedented times, there is so much uncertainty for all businesses and their employees. Below are a few of the more frequently asked questions that may help employers and employees. These are correct at the time of writing (17.3.2020) but be aware that emergency government guidelines are changing all the time.

If the government makes employment changes will this affect my contract?

Firstly you must always check your contract before you do anything. Any statutory changes will change your term of employment (e.g. increases to the minimum wage, changes to public holidays) but if you have an enhanced contract (your employer gives you above and beyond the legal minimum) this will still stand as long as the statutory changes have not increased above what you are currently offered.

My employer never gave me a contract do I not have rights?

All employers should supply you with a written terms and conditions of employment however in reality that doesn’t always happen especially with small businesses. If you have a record of consistently providing work and have received a regular wage, you will have a customary contract – an unwritten I’ve turned up to work and you’ve paid me contract. You will be entitled to basic statutory employment rights only and no enhancements.

I’ve been told to work from home but what if I can’t do my full job?

Many businesses have been very hesitant to the benefits of offering working from home so are very unprepared for this sudden shift in thinking. Many will not have the full systems in place for you to effectively carry out all your normal day to day activities. All these changes will be classified as a temporary reasonable adjustment to your employment so I would recommend being very upfront with your employer keeping them up to date (in writing) with issues you are having and what areas of your role can not be performed at home. This will then give them the opportunity to add systems to support your role or understand some functions may not happen. You should not be considered having performance issues due to your inability to carry out your role in this situation so having the evidence in writing will support you should you face any form of disciplinary.

My employer wants to Lay-off staff without pay, can they do that?

It all depends on what is in your contract. Short term working is where your hours, and therefore pay, are temporarily reduced. Lay-off is where you are told to stay away from the business without work.

If there is a clause for unpaid Lay-offs then yes they can once they have paid the statutory maximum of £29 per day or your daily pay (whichever is lower) for five days in any 3 month (pro rata for part time). Once your Lay-off period is over 4 weeks or 6 weeks in any 13 weeks period, you will be entitled to ask for redundancy if you qualify. If your contract does not include these terms then any Lay-off must be at full pay.

If you have a short term working clause in your contract then you can be asked to temporarily reduce your hours at a pro rata rate of pay. If there is no clause in your contract then your employer can make the request but you are entitled to stay on your current terms and conditions including hours and pay. Quiet often employers will ask large numbers or all employees to take a temporary reduction to reduce the risk of redundancies and preserve the business long term.

More information is available at https://www.gov.uk/lay-offs-short-timeworking

Can my employer make me use my annual leave?

Yes. Unless it specifically written in your contract that they can’t, an employer can make you take your annual leave or refuse an annual leave request with a legitimate business case (e.g. too many people away from the company at the same time). If your employer tells you to take annual leave they must give you double the notice for the amount of time they want you take. So for one weeks’ holiday they must give you two weeks’ notice. However, in these fast moving and extraordinary times, employers may suggest you take annual leave rather than unpaid Lay-off for example, without the statutory notice. This will be your choice to forego your rights and you will probably need to agree this in writing.

I’ve been told to self-isolate for 14 days – will I get paid?

Again check your contract for any enhanced sick pay options. If not, you will be entitled to Statutory Sick Pay (SSP) even if you are not showing symptoms but have had formal confirmation that you must self-isolate. SSP has seen some temporary changes by the government relating to Covid-19. You will be entitled to statutory pay after your first three “waiting days” and you will be paid by your employer for up to 28 weeks but you will still have tax and national insurance deductions. The changes to small and medium business being able to claim SSP back will not affect you being paid.

Get more information here:
https://www.gov.uk/statutory-sick-pay

I am self employed, can I claim SSP?

Unfortunately not however there is a contributory benefit call Employment and Support Allowance (ESA). There are conditions and you must have paid your National Insurance for the last two consecutive years with your tax self assessment to qualify but the government has put measures in to simplify the process due to Covid-19.

https://jessicafreemanhr.com/self-employed-options-for-sick-pay/

I’ve been made redundant, what should I do?

Assuming that your redundancy has been fair and that all due processes have been followed, you should look at the YouGov website for what, if any, benefits you are entitled to.

https://www.gov.uk/redundancy-your-rights

I have a zero hours contract but my employer has no work for me, can I claim benefits?

Not all zero hours contracts are equal and some employers do offer enhanced support for it’s workers so, as always, check your contract. On the basis that you have a basic contract, a break in employment is considered after your employer has not provided work for a full calendar week (7 consecutive days) and you may then be able to claim some benefits or Universal Credit. However your employer must pay you any outstand wages and holiday accrued.

Being self-employed usually means if you don’t work you don’t get paid. The recent global events of Coronavirus or Covid-19, has raised the question of what to do if you are forced to self-isolate but are self employed; this could have a huge impact on your earnings especially if you can not work or sell your product from home.

Unfortunately, you would not be entitled to Statutory Sick Pay (SSP) as this is only available to those with an employer (there is a petition for parliament to debate this issue with the link below) however all is not lost!

Self employed people who are unable to work could be entitled to Employment and Support Allowance – ESA. This is a payment for when you are unable or restricted from working due to illness. There are many criteria you must match, including two years of current National Insurance contributions with your last two tax returns, and many hoops to jump through (there always are!) but you could be entitled to up to £111.65 per week which, although not the equivalent of working, but may help just a little.

The link below gives you all the details of who is entitled to claim and how to go about it…..

https://www.gov.uk/employment-support-allowance

https://petition.parliament.uk/petitions/300336