The situation is obviously volatile and Information Guidance or perceived advice cannot be guaranteed. This guidance note is mainly aimed at those giving information and guidance, or assisted Self Help.
There are three Areas:
- Business and Employment
- Welfare Benefits
A. Business and Employment
1. Employed: On PAYE
Your employer has the responsibility to keep you safe. H&S section 44.
Jobs Retention Scheme. (Covers any employer including voluntary or non-profit organisation)
If furloughed a grant of 80% of taxable income of up to £2,500 pm. Additionally employers can claim NICS and minimum pension contributions. Minimum furlough is three weeks if employed from 28/02/20 and payments backdated to 1/03/20. Employers can choose to top this up. Remember only until the end of June.
National minimum wage rules are suspended for those on Furlough as they are not working.
(If a commission forms a percentage of your pay that will be included.)
For those whose pay varies average monthly earnings for 19/20 or essentially the previous year.
The Furlough Scheme has been extended to those on a HMRC payroll from 19/03/20.
If on PAYE and not ‘Furloughed’ your employer has to meet your 100% pay packet. (whatever your working conditions.) As per current employment law.
Redundancy before covid19; Usual rights.
Post, covid 19 rules. If you signed a contract within the time frame (seems to be circa 28/02/20; which is moveable) protected by employment contract law which would indicate, you would be furloughed.
2. Self Employed
Following the announcement on 26/03/20:
Essentially if your main income is from self-employment then the following support applies:
Via the Income Support Scheme. (Which is essentially a taxable grant.) Yes, they could claw it back
You can claim 80% of your average monthly s/e profits over the last 3 years, if you have the proof. If you don’t the chancellor is open to a lot of negotiation.
A further 4 weeks grace for late subscribers has been granted and HMRC will look at say a 1-year profit if registered. They will negotiate everything, so don’t be shy in talking.
Don’t forget they are already offering tax deferrals of self-assessment payments on account for 6 months.
This is only available to those with s/e profits of £50k or lower, registered as s/e and have a tax return and you make the majority of your income from self -employment.
You claim via HMRC and funds will be available possibly by late June. (*Please see the WB section.)
Also, you can claim and still do business. (astonishing, yes at the moment).
The quid pro quo will be a hike in NI’s, in line with PAYE’s down that dirty road.
Sole Traders will be able to access the Business Interruptions Loans, no limit via at least 40 banks. Interest free for 12 months. Plus, the Hardship Grant Scheme
(10k for a genuine business with VAT returns of 50k or below, 25 k above. They have been turned into non-refundable grants available from LA’s.) Successful scheme.
But don’t forget:
The Government suggests but not yet will underpin loans ..UNDERPIN. (Via a bank loan if accepted). But rarely talked about.
and oh my god….https://www.gov.uk/guidance/apply-for-the-covid-19-corporate-financing-facility
To date all bank loans. With the usual checks, but maybe pressure from above will allow some security. (We’ll see).
LA business rates have been abolished for the rest of the year for retail, hospitality and leisure.
3. Directors and Incorporated.
Directors on dividends should apply to the Job Retention Scheme and could be accepted up to the income threshold.
If you are self employed and incorporated via essentially yourself, sorry you have a problem; HMRC always had an issue with this area. You are in the 5% who will not be included at the moment.
The Treasury has confirmed if part of your income is PAYE if will be honoured at 80%.
B. Welfare Benefits
1. Current claimants.
No requirement to attend Job Centres or ‘sign on.’ This will be reviewed towards the end of June. Job Centres are closed. Contact via telephone or email. (No details from DWP on ongoing sanctions or the method to claim a hardship payment but watch this space.)
2. Reconsiderations and Appeals.
The DWP as yet have given no guidance to ongoing Reconsiderations, (particularly concerning; as in that phase that will mean no income for the appellant). So, yet again forced into Universal Credit, which could be wholly unsuitable.
The DWP have though announced from 23/03/20 a suspension of Benefit reviews and reassessments. (However, if being reviewed no confirmation that a claimant would be paid the review rate). The suspension will be for 3 months initially.
HMCTS on 18/03/20 insisted that video and telephone tribunals could take place but left that interpretation quite open to an argument of practicability for an appellant. In reality, an adjournment might be very acceptable if that arrangement would be obviously unsuitable.
HMCTS have given no indication when face to face tribunals will be resumed. (Either first or second Tier.)
3. Universal Credit
(Beware, UC might not be suitable for your situation, consult a reputable and experienced Welfare Benefits practitioner before applying.)
In the last 3 weeks 950,000 have applied for UC, the DWP have not confirmed how many have successfully negotiated the labyrinth of the 5-week assessment period.
The chancellor has granted an extra £20 per week not only for Universal Credit and basic Working Tax Credit but an essentially promissory note to JSA and ESA. Plus, the April increase in line with inflation from 06/04/20.
Possibly New Style ESA or JSA may suit your situation a lot more economically than UC. And easier to claim. Also, once you’ve claimed Universal Credit you can pretty much never go back.
For advisers you always have to consider Legacy over Universal. And we know the problems inherent with Universal from the get-go.
The self-employed income floor has been abolished, that would equate to £15600 s/e profits pa in London as assumed income. The plan was it would be abolished anyway once Managed Migration came in.
If you are s/e and awaiting the late June ISS payment and really have no income. Your only choice maybe to claim. But beware.
If you claim UC, any housing benefit and tax credit claim will be incorporated into it. Tax credits particularly are calculated differently and may leave you worse off, should you go back to work. Housing Benefit
4. Housing Benefit
Housing Benefit has been adjusted to 30% of the average rent.
To qualify you must have earned £118 p/w or more for the past year and government led SSP will be retrospective from 13/03/20. The government have indicated it will be payable from the first sick day. (Use company benefits if greater than £94.25 p/w.)
If you have to self-isolate including s/e then you can phone 111 and arrange a self-isolation note.
6. Council Hardship Fund
£500m. Pretty much set up to give councils the ability to alleviate those most vulnerable to Council Tax.
1. Homeowners (Mortgagees)
The government has ‘instructed’ lenders to be very lenient over the next three months and consider mortgage holidays. But has shied away from any law. If a lender agrees (and many are not) to assist and defer mortgage repayments; any deferral plus interest will be rolled up into the remaining term. Which given record low interest rates is the most cost-effective solution but will mean an increase in repayments after any break for forbearance.
Any insurances should be considered if appropriate.
Communicating with your lender at the earliest opportunity is vital. If a lender is unwilling to co-operate follow their grievance procedure before escalating the complaint to the Financial Ombudsman Service (an arm of the FCA)
2. Renters both Social and Private Sectors
Notice to Quits have been extended to 3 months for both sectors. But not outlawed.
Claims for Possession have been suspended for 3 months from 27/03/20 after the government were embarrassed into doing so.
Current Possession claims and notices of eviction (warrants) have been stayed for the same 3 month period.
3. Lodgers and Temporary Housing Licencees
Not included in the Coronavirus Bill or any other directive from this government. However, many lettings with agreements that purport to provide security of tenure are sham, so check the actual nature of the letting. If the occupier has exclusive use of at least one room and they are liable to pay rent, then they probably have a tenancy and cannot be lawfully evicted.
If any occupiers are asked to leave they should be referred to Advice4Renters for advice by our specialist team. Give us a call on 0207 624 4327 or email us at email@example.com Our phone lines are open Mon-Fri 9:30am-4:30pm.