According to Daniel Barnett, who is an employment lawyer:
The House of Commons Public Bill Committee has proposed an amendment to the Coronavirus Bill, entitled Statutory Self-Employment Pay.
If accepted (and I think it will be), it compels the government to introduce Regulations providing that "freelancers" (undefined) and "self-employed people" should receive guaranteed earnings of:
(a) 80% of their monthly net earnings, averaged over the last three years; or,
(b) £2,917 per month
whichever is the lower.
The purpose of this amendment is to make the Government ‘top up’ self-employed workers’ earnings to the lower of 80% of their net monthly earnings or £2,917 a month.
I think there are those who think this may become law. I do not. As written this is far too simplistic to use; there are no anti-abuse provisions, and no flexibility with regard to reduced rather than no income. There is also no recovery mechanism in the case of over-payment. What the amendment does is bring pressure to bear on the government to deliver a scheme. It is not the scheme itself. Please do not get hopes up as yet. This is a false start.
Richard
What is the position of agency staff e.g. supply teachers, TAs’, nursery staff – who are employees of the relevant agency. I have seen conflicting opinions from various legal firms on whether they can benefit from the Job Retention Scheme.
As yet no one knows
Hi,
I don’t necessarily agree and that’s a misleading headline – don’t state an opinion as fact.
In these specific circumstances the self-employed are stuck in a loophole with other areas of the economy such as workers and businesses are not, therefore who is going to jump into this section of the economy if they are already being provided with some form of economic protection? Some likely will obviously but not en-masse.
Any freelancer / self-employed would likely be identified via their self assessment tax records and their URN code (as an employment lawyer I am sure you know more than me on this) which isn’t simply available at the drop of a hat, HMRC have to send you one. So people can’t just claim without proof they are already self-employed and it would take weeks to setup anyhow. In the current situation this may be longer than any possible 12-week shutdown – though this crisis could last a longer.
Any provision for reduced rather than no earnings and overpayment would need to be shown up in any subsequent tax filings, the adjustments could be done then, which in this case would be for either Jan 2021 (for the year up to this April) or Jan 2022 for the following year (from April 7 2020). With self assessment HMRC already entrusts individuals to self declare, misuse of the system would be the same in this case or not. Penalties would equally be the same, it would essentially be fraud.
This would also buy time for any retrospective checks to be done. In terms of speed and timing, the government might be tempted to get something ready now or accept and modify this amendment – and stop people packing onto trains and spreading a virus which is the immediate threat to life and national security – and deal with the financial mess later. They’ve already pledged billions if not trillions to save the economy at very short notice, I can’t see this being much different.
Also, if Parliament passes the amendment and the amended Bill, then it will become law surely. Irrelevant of what the government wishes to do.
I am not saying there will be no law
I have written at length on why we need a law and what it might be
I am just saying this will not be the law: it may well be too generous and it is also far too simplistic
Ity is you who is making stuff up by pretending something like this will be law
3 grand a month minimum?
wow… I’ve been massively underpaying myself all my life!
I’m self employed gardener
Work alone
Travel alone
Where does this leave me??
I want to do the right thing
Surely I can work !?
It’s no different than going for a walk or shopping for essentials!!
Please advise
I need to work
Wait to see what the rules for the self employed will be
They are coming, I am told
What about business owner/Directors who are paid through small salaries and dividends? We are not classed as self employed. Currently there is absolutely no provision for us at all, our income has stopped overnight.
We are a jobbing Printers so our order book dried up last week and many existing orders cancelled , so no income is coming into the business to give us a salary. Yet, we are going to have to work over this period on business planning so we can rise from the ashes once all of this has finished, to protect the business and jobs. And at the very least manage all of the furlough arrangements for our staff who will get 80% of salary.
So we have a huge amount of stress and accountability with ZERO income.
It seems that there is no sympathy from the government for dividend payers based on what has been said …. but we simply do not know as yet and will have to wait and see the detailed rules
There never has been, but if the government detest dividend payers, they should reform the rules to prevent it. Not penalise them now.
Hi,
I am an accountant who was on employment contract for the same employer for 5 years.
I have switched my contract to work as a limited company since February 2019 till now
Only one self assessment submitted which has my income for February & March 2019, previous tax years every thing was submitted through payroll and all the taxes were paid through PAYE.
What is my position now? And if that ”Coronavirus Bill” – entitled Statutory Self-Employment Pay law applies. How am I going to prove my income giving that only last self assessment was showing only two months income for the limited company?
It’s scary and very stressful situation.
We’ll have to see the rules
What about people without 3 years trading history, or indeed any trading history, because they have only just launched a venture, which has now been torpedoed by coronavirus mitigation measures? What about people on Universal Credit, claiming JSA as self employed people in the 1 year business development period?
Apologies if I have already said this but….
Getting income to everyone seems to be technically difficult.
In the immediated, would it not be quicker and easier to reduce people’s outgoings?
Along with mortgage and rent freezes (that have already cause quite a debate!) Utility bills, broadband/phone are frozen. Also any outstand interest payments on private loans/debts are also frozen.
I can’t think what other outgoings would need to be covered? (Feel free to add suggestions)
Then there is food!
But it looks like we are heading to a system of rationing sooner rather than later. The logistics of which are big. Would it not be easier for the government to pay supermarkets at close to cost for the food?
The distribution will need to be sorted for rationing anyway.
Working on that blog now – it will be out in the morning
Energy pretty low today – not over it yet, it seems
‘Energy pretty low today’
Really? I wish my energy levels were as low as yours Richard – I could run for Parliament on your levels of ‘low’ Sir!!
I am knackered and trying to take it easy
You do that Richard.
Not a bad idea. There is no guarantee that what you’ve had might not come back.
I am in the unusual position of agreeing violently with all you say.
Some additional, more detailed points against :
a. no regard to the million or so who cease/start each year* – so no money for those with no history but “helicopter money” for those retired, now in employment etc
b. no clear reason for the more generous cap (£35,000 a year)
*and the timing could hardly be worse if “averaged over the last three years” means to 16/17 to 18/19. (If it’s supposed to mean to 19/20 then I think it’s bonkers.)
PS
the amendment I’ve seen is from the Lib Dems: NC13 at bottom of the page https://publications.parliament.uk/pa/bills/cbill/58-01/0122/amend/coronavirus_daily_cwh_0320rev.8-13.html