Why the Uber Supreme Court ruling will have a massive impact on small businesses

Uber have lost their appeal to the Supreme Court over the ruling that their drivers are classified as Workers and not Self Employed. Uber had contested the original decision as they believed it only applied to a small number of people and that they had addressed the concerns with this matter. However the ruling now means that not only Uber but many other organisations will need to look closely at how they are utilising self employed contractors in their business.

This all comes down to level of control and choices that a person can make during their working time. For Uber, it has been ruled that they take control of the workload of that person from the moment they clock on as available to when the clock off which qualifies them as a Worker. This now gives them some rights including minimum wage, holiday pay and protection from whistleblowing but not employee rights. The ruling has also included that, those who qualify, will be able to apply for backpay of earnings for up to two years (not finalised so may be longer) or £25K whichever is larger through an employment tribunal or up to six years in the County Court and 5.6 weeks of paid annual leave for each year worked. This has an enormous financial impact for Uber.

Any organisation that uses self employed contractors will now need to look very closely at how these people are utilised in their business and if this president could apply to them.


Delays to 4th Self Employment Grant

Chancellor Rishi Sunak has made the decision to delay announcing the details for the 4th Self Employed Income Support (SEISS) grant until after the 3rd March as part of his budget statement.

Back in October 2020 it was originally announced that the 4th grant would be available from the end of February after the period up to January covered by the 3rd grant expired.

The announcement was made exclusively through Martin Lewis on MoneySavingExpert.com rather than through official government outlets and that only the conditions for applying for the 4th great would be announced and not that the 4th grant will be available leaving millions of self employed people left waiting for much needed support and information.


Brexit – can I still employ someone from the EU?

More than likely due to Covid, the final Brexit deal trickled through at 11pm on January 1st 2021 fairly unnoticed – still working to EU time to last!

Unless you are importing or exporting goods, the only other immediate impact is on employment. If you currently employ EU Nationals you must ensure that they either qualify and have applied for a skilled worker visa, and you as an employer have a sponsor license, or they have applied for settled status by June 2021 (an employer can not force someone to take settled status however it would be advised to encourage this if they want to stay working in the UK).

You can still employ people from the EU but they will now have to pass the criteria for skilled worker visa;

– they have a job offer from a Home Office licensed sponsor
– they speak English at the required level
– the job offer is at the required skill level of RQF3 or above (equivalent to A level)
they’ll be paid at least £25,600 or the ‘going rate’ for the job offer, whichever is higher.

Also an employer must apply for a sponsor license before the start of the employment in a similar way to employing non-EU nationals without the right reside in the UK.

There are some exceptions to the minimum payment to cover skills shortages but that still carries a minimum wage of £20,480 which arguably leaves many key roles exempt.

The EU provides an invaluable pool of highly skilled workers and employers should not see this as a barrier to employing the right people for the job but you must ensure you fully comply with all the new requirements or risk penalties. Full details can be found here;


Furlough extended to the end of April 2021

Chancellor Rishi Sunak has just announced that the Furlough scheme will now run until the end of April 2021 at the full 80% of salary along with Covid business loans being extended until the end of March and it is expected that the self employment grants will mirror these changes.

This comes before an expected announcement from the Education Secretary Gavin Williamson is asking secondary school to got to online teaching for the first week back in January.


Could this be a game changer for business meetings?

A report from the Evening Standard confirms that tier 2 restrictions allow for face to face business meetings to take place in restaurants or pubs as long as social distancing restrictions are carried out.

The report goes on to have confirmation from a Number 10 spokesperson that face-to-face work meetings are exempt from gathering restrictions. This could be a life line for the self employed but also a possible opportunity to bring members of a workplace together that have only met online for the last 10 months.


Thanks to client Tony Marks of Starfish and Coffee, Brighton for sharing the article https://starfishandcoffee.cafe/

Furlough and SE Grant dates for your diary!

There have been lots of updates and changes to how both furlough and the self employments grants will work since the announcement of the second lockdown which has led to confusion and reports constantly changing. From what we currently know here are what we believe to be the key information points, important dates and updates so far;

You can claim furlough for employees that were not previously registered on the scheme but have been furloughed due to the second lockdown restrictions.

A furlough claim must be submitted within the two weeks after the end of the calendar month that the employee was furloughed. For example if an employees is furloughed in November 2020, you must submit your claim to HMRC by the 14th December 2020 and so on.

There are some reasonable excuses for late claims but they centre around incapacity due to death of a relative or chronic illness of the employer.

Self employment grants
An email is due to be sent from the week commencing 23/11/2020 to all those who qualified for the previous grants to log on and confirm they are claiming this third grant.

Payments should start to be made from the 30/11/2020

This will cover the three month period from November 2020 to January 2021. Another claims process will then begin in February 2021 for the final payment.

Those who did not make a claim last time but think they may be entitled should log onto the government gateway and check their status.

For self employed people who have removed themselves from paying VAT this year, you must respond to the email that was sent by HMRC about your trading status. HMRC will consider this the end of self employment and you will not qualify for a grant unless you confirm you are still trading.

Furlough scheme extended to March 2021….

In a surprise early announcement, Chancellor Rishi Sunak, has extended the 80% of wages furlough scheme until March 2021. It is claimed that this announcement is an to attempt to give some reassurance to businesses that support is there in the longer term should it be required and to preserve job throughout Christmas rather than an indication that the current lock down restrictions will last longer than the predicted 2nd December 2020.

Details are limited but the Self Employment Grant is also being extended at 80% of average profits to include December and January.

These measures will be reviewed in January 2021 with no details of levels of contributions for either scheme.


BREAKING – Government to double Self Employed Grant to 80%

Rishi Sunak has announced that the government will double the Self Employed Income Support Scheme (SEISS) to 80% of your average trading profit for November and a further 40% for December and January up to a maximum of £5160.

This payment has also been brought forward to 30th November 2020 rather than the 14th December to help with latest lock down restrictions starting on the 5th November 2020.

No details have been confirmed for the February payment.


Self employment grants doubled for both November and February

Chancellor Rishi Sunak has just announced, along with expanded support for businesses moved to tier 2 and 3 restrictions, an increase to the next two self employed grant payments from 20% to 40% of earnings up to a maximum of £3750 per month for those that are still seeing a significant impact to their business during this second wave of Covid.

Grants will be available to cover the three month period of November to January and then again in February.


Employees can now claim for tax relief on working from home costs…

A question that I get asked all the time since lockdown began is should an employer be paying a contribution for gas and electric costs for all employees working from home as their usage is now higher.

Legal, unless there is something in their employment contract that says you will, there is no precedent for this. Morally, well that’s a different story.

However, there a little tiny light of help for staff in the form of tax relief. I has been commonly known that self-employed people working from home can make deductions before tax for heating, lighting and some other home office costs but this is now also available to those working from home due to Coronavirus.

From the 6th April 2020 employees can claim the percentage of tax they pay from £6 per week without providing a breakdown of costs. So if they are in the 20% tax bracket they will receive 20% of £6 = £1.20 of tax relief per week that they work from home for any amount of time (this does not need to be full time). They can claim for more than this but they will need to provide receipts, contracts or other evidence of the exact cost.

There are a few conditions though – there always are!

To claim it must be that you have given the employees no other choice but to work from home i.e. your office has closed or all staff are on a rota system to work from home to comply with Covid risk assessments, they can not claim if you simply choose to work from home.

Employees must personally register with the Government Gateway and fill out a P87 form. Many PAYE employees will have never needed to register with the tax gateway before and the system can be confusing. However, they should only have to go through this process once as this will register with the tax code your payroll has and so the tax relief will be calculated in their salary.

It may not seem like much but as one large supermarket used to say – every little helps!