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.