Furlough for IR35 workers in the public sector

The Cabinet Office has confirmed that the coronavirus job retention scheme will also apply to off-payroll contractors working for public sector organisations.

Some of these individuals will work as contingent workers, being on short term or variable hours contracts. A number of these will have been working through personal service companies before the off-payroll working law change in April 2017 and will now be paid under deduction of PAYE, while not having full employee status.

This means that the scheme can now be offered to those individuals:

· working through a personal service company,

· for a public sector client,

· where the worker is unable to carry on working due to the COVID-19 pandemic.

Furlough can now be offered to all such public sector workers, described as contingent workers in the announcement, including those being paid under PAYE, through an umbrella or their own personal service company.

COVID-19: support for businesses

The Chancellor has set out a package of temporary, timely and targeted measures to support public services, people and businesses through this period of disruption caused by COVID-19.

This includes a package of measures to support businesses including:

· a Coronavirus Job Retention Scheme

· deferring VAT and Self-Assessment payments

· a Self-employment Income Support Scheme

· a Statutory Sick Pay relief package for small and medium sized businesses (SMEs)

· a 12-month business rates holiday for all retail, hospitality, leisure and nursery businesses in England

· small business grant funding of £10,000 for all business in receipt of small business rate relief or rural rate relief

· grant funding of £25,000 for retail, hospitality and leisure businesses with property with a rateable value between £15,000 and £51,000

· the Coronavirus Business Interruption Loan Scheme offering loans of up to £5 million for SMEs through the British Business Bank

· a new lending facility from the Bank of England to help support liquidity among larger firms, helping them bridge coronavirus disruption to their cash flows through loans

· the HMRC Time To Pay Scheme

If you do have any queries, please get in touch with your usual contact at Xaviers Chartered Certified Accountants or email: info@xaviersaccountants.co.uk

Deferral of VAT payments as a result of COVID-19

The Chancellor announced a VAT payments deferral on 20 March to support businesses with cash flow during the COVID-19 pandemic.

This means that all businesses with a UK VAT registration have the option to defer VAT payments due between 20 March and 3‌0‌‌ June.

You therefore have until 3‌1‌‌ March 2021 to pay any VAT deferred as a result of this announcement.

You do not need to inform HMRC if you wish to defer payment. You can opt in to the deferral simply by not making VAT payments due in this period. If you pay by Direct Debit you should cancel this with your bank. You should do so in sufficient time so that HMRC does not attempt to automatically collect on receipt of their VAT return.

Should you wish, you can continue to make payments as normal during the deferral period. HMRC will also continue to pay repayment claims as normal. You must continue to submit VAT returns as normal.