Umbrella companies, IR35 and the Job Retention Scheme

[Lance]

Only if you are self-employed and fill in the self-employed assessment supplementary forms (SA103S) when doing your self assessment tax return.

Even Claim a grant through the coronavirus (COVID-19) Self-employment Income Support Scheme - GOV.UK says that if you use a limited company you need to use the Job retention scheme.

got this today fropm Gorilla

Unlike the Self-Employment Income Support Scheme (SEIS), the Job Retention scheme should be accessible to those working via a limited company, and you will be able to obtain the grant based on salaries payed from the limited company (however any payments made via dividends are excluded).

Employers can claim up to 80% of furloughed employees usual monthly salary costs, up to a maximum of £2,500 per month. Employers can choose to top up an employee’s salary but do not have to under the scheme. Claims can be backdated until 1st March 2020 if applicable.

The scheme is open to UK employers that have created and started a payroll scheme by 28th February 2020 and have a UK bank account.

[eek]

Unless I didn't get the right message HMRC will decide if you will be due any help based on your filings over the last three years. If you earn more than £50k you get nothing. So you won't know until they contact you in June IIRC.

Only if you are self-employed and fill in the self-employed assessment supplementary forms (SA103S) when doing your self assessment tax return.

Even Claim a grant through the coronavirus (COVID-19) Self-employment Income Support Scheme - GOV.UK says that if you use a limited company you need to use the Job retention scheme.

[DaveB]

Thread from Andy Chamberlin (IPSE) on the help available to freelancers.

https://twitter.com/AndyIPSE/status/1243460870858047489

[cojak]

This is why we tell all new contractors to save for the hard times (aka warchests).

[Lost It]

Unless I didn't get the right message HMRC will decide if you will be due any help based on your filings over the last three years. If you earn more than £50k you get nothing. So you won't know until they contact you in June IIRC.

[eek]

And what is the "base salary" component of what you get paid (what does or would go on your self-assessment). On the face of it, if you can furlough yourself, and not be doing any work because of Covid-19, you can claim 80% of that.

But, whether directors are eligible for any claim is still to be proven (one way or the other). I suspect this is a case where someone will try it and we'll see what happens.

Base salary would be national minimum / living wage - everything on top of that is called a "bonus". So in theory an umbrella company could claim and pay furloughed workers the minimum wage but they can't as they are only receiving 80% of the figure and aren't in a position to pay the rest.

And if a contract is terminated they can't as there is a requirement that the person being furloughed has work to return to at the end of it.

Elsewhere there was a discussion that a lot of firms are adopting a 2 tier approach, making redundant anyone they think they cannot justify keeping and furloughing only a core team ready for when a smaller business reopens later this year.

As for company directors at the moment they are receiving zip as you cannot furlough a company director (there is always admin that needs to be done).

[Paralytic]

When we're you benched?

And what is the "base salary" component of what you get paid (what does or would go on your self-assessment). On the face of it, if you can furlough yourself, and not be doing any work because of Covid-19, you can claim 80% of that.

But, whether directors are eligible for any claim is still to be proven (one way or the other). I suspect this is a case where someone will try it and we'll see what happens.

Has anyone who has started one of the (many) threads on this subject actually put in a claim as an employer, or asked their Umbrella to do so, as per: Claim for wage costs through the Coronavirus Job Retention Scheme - GOV.UK

[Paralytic]

Let's not forget that now is the time to be kind, Paralytic. Hope your week gets better

I'm fine thanks and fortunate that I've not been financially impacted by Covid-19, but am well aware that could happen at any time and am preparing myself appropriately. Part of that preparation is reading what others have found out and not just asking the same questions again.

I'm not expecting any handouts from the government for Ltd company contractors.

[northernladuk]

When we're you benched?

[Wombat14]

Sorry, I explained myself poorly. According to the treasury, via the Guardian:

"I’m registered as a personal service company – but it’s just me. Do I apply for help as an employee, or as self-employed?

The Treasury said: “Those who pay themselves a salary and dividends through their own company are not covered by the scheme but will be covered for their salary by the coronavirus job retention scheme if they are operating PAYE schemes.”"

So, I:

1) Own a limited company of which I'm the only employee. I am not self-employed.
2) Operate a PAYE scheme.
3) Was caught inside IR35 from autumn 2016 to autumn 2019. So no dividends, and a decent salary that varied over the months according to how much I billed the client.
4) Am therefore, if the quote above and my understanding are correct, eligible to claim 80% of my salary through the coronavirus job retention scheme.

That seems to make sense to me. What I don't know is how the salary is defined. This is obviously straightforward for most employees, cos it's defined in your contract, but IR35 makes things more complicated. The way it worked in practice is that I paid myself a monthly salary of £5k (split between me and HMRC), which caused excess funds to accumulate in the LtdCo bank account. Periodically (typically every six or twelve months) InTouch would work out how that accumulation should be distributed between me and HMRC, and the appropriate amounts would be bunged on top of that month's salary and tax payments.

So, if it's correct that 80% of my salary is covered by the coronavirus job retention scheme, it would be interesting to know how I or HMRC determine what my salary actually is. I should add that it's very possible that I'm over-thinking this, and that the answer may well be £0.