Coronavirus financial measures – extension to the Coronavirus Business Interruption Loan and clarification for IR35 Public Sector Workers over furloughing

IR35 Public Sector Workers

The Cabinet Office has confirmed the Coronavirus Job Retention Scheme will also apply to off payroll contractors working for public sector organisations. The IR35 legislation for private sector workers was postponed till April 2021, so this announcement is in regard to Public Sector Workers only.

It is thought that a lot of public sector workers are probably still working, so the use of this facility won’t be that high but it is there.

The scheme is now available to individuals working through a personal service company for a public sector client, where the worker is unable to carry on working due to COVID 19 pandemic.

It includes those being paid under PAYE, through an umbrella company or via their own personal service company.

This is to enable these contingent workers who cannot work due to sickness, self isolation or temporary office closure to still be able to be paid 80% of their pay rate up to a maximum of £2,500 per month. This can be backdated to 1 March 2020 and will initially be available for at least 3 months.

If however you are unable to work due to childcare responsibilities you will be paid on the same basis as above but only for a period of 7 days whilst you make alternative arrangements.

The £2,500 per month cap relates to gross pay, excluding statutory costs such as NI, holiday pay, apprenticeship levy and pension and supplier margin.

The purpose of this blog is not to go into detail of calculations.

Government guidance suggests the worker should contact their Supplier in the first instance. It may also be worth contacting your accountant, if you have one, for further guidance.

Do be aware though that if your assignment is coming to an end, you would only be able to benefit from this scheme until the date your assignment was due to expire.

Coronavirus Business Interruption Loan

The Chancellor has announced the extension of the current Coronavirus Business Interruption Loan Scheme to all viable small businesses affected by COVID-19.

Small businesses should be eligible if they need finance to keep operating during this time. Whereas before it was only being made available to those who are unable to secure regular finance.

Lenders will be prevented from requesting personal gurantees for loans under £250,000 and they are making operational changes to speed up lending approvals.

There is also a new Coronavirus Large Business Interruption Loan Scheme to assist middle businesses that were not covered by the initial proposals.

There is more guidance on the government website of all financial measures