Measures designed to combat the spread of Covid-19 have financial consequences for us all. As a result, the Government has introduced a series of initiatives to help business owners, contractors and self-employed people through this difficult period. Here we summarise what help is available for self-employed, CIS and Umbrella workers.
Help for CIS Contractors and the Self-employed
The Government has announced a package of measures to help the self-employed during the COVID-19 pandemic. CIS workers are classed as self-employed, so are covered by the scheme and eligible for a grant of up to £2,500 per month.
To be eligible, you must have submitted your 2018/19 tax return which was due in January. If you haven’t yet submitted it, get in touch ASAP to use our quick and simple tax return service and we’ll ensure it is done correctly and compliantly without delay – 03300 580 190.
How does the grant work?
- The grant is part of a package called the Self-employed Income Support Scheme (SEISS)
- It allows you to claim a taxable grant worth 80% of your trading profits up to a maximum of £2,500 per month for the next three months
- It’s available to those with self-employed trading profits of less than £50,000 earning more than half of their income from self-employment
- The grant will be paid in June and back-dated to March and the scheme will be extended if necessary
- The scheme doesn’t affect your ability to trade – you can continue to earn and still be eligible
You do not need to do anything to claim the grant. HMRC will be in contact with all eligible self-employed people in due course. You can find out more here.
Help for umbrella contractors
We are pleased to report we are now able to make furlough payments of 80% of full average gross pay to umbrella employees (subject to the scheme cap of £2,500 per month).
We are well aware of the importance of this issue to our umbrella customers and have acted as quickly as possible following clarification from HMRC on the rules relating to umbrella furlough payments.
We have put in place a straight-forward application process via our secure members area for people whose roles have been furloughed as a direct result of Coronavirus. We are working with our agency partners to verify applications.
Please note that the Government’s rules mean that CJRS payments can be made to employees who were on our PAYE payroll and who had been paid by us on or before 19th March 2020. As the job retention scheme has been put in place for those employees that are temporarily unable to work as a result of Coronavirus, you will need to provide details showing that you were on an assignment that was suspended or terminated as a result of Coronavirus.
Public sector organisations that use umbrella contractors have been issued with guidance from Government that says they can continue to process payments for contractors who are temporarily unable to work as a result of Coronavirus, as opposed to using the job retention scheme.
Benefits and schemes to ease cashflow
VAT- If you’re VAT registered, VAT payments due between 20th March and 30th June 2020 can be deferred to March 31st 2021. If you wish to defer payment, you do not need to do anything apart from cancel your direct debit, if you have one set up. VAT record submissions must be made in the usual way.
Self-assessment payment on account - payments which would be due by 31st July 2020 can be deferred to January 31st 2021. If you do defer payment, do consider how you will ensure the cash is available for the new deadline. If you think you will have difficulty saving the money, you can access a budget payment plan – let us know and we will help you.
Benefits - if you’re on a low income and eligible for Universal Credit, you will benefit from an increase in the region of £1,000 per year (circa £80 per month). The temporary increase has been put in place to help people whose finances are affected by Coronavirus.
We're here to help
Whilst health and wellbeing are the priority for us all, the financial impact of Coronavirus will undoubtedly cause significant worry. We have put together a detailed article about the various things you can consider doing to manage your finances through these uncertain times. Read it here.
If you’re in the construction industry, we’ve teamed up with Lighthouse Club, a charity which provides emergency financial aid to construction families in crisis, advice on occupational health and mental wellbeing as well as support on legal, tax and debt management matters. This is a fantastic organisation and we encourage you to use their 24/7 Construction Industry Helpline if you are in distress.
We are working hard to ensure 'business as usual' for our contractors and agency partners during the Coronavirus pandemic.We appreciate that many self-employed and Umbrella contractors - those in construction, education, and healthcare, for example - are playing a vital role in helping our country get through these difficult times.
We will update this page regularly but keep an eye on our blog for the latest news.