Hudson Contract has warned that temporary construction workers are being shut out of the Government’s supposedly wide-reaching Coronavirus Job Retention Scheme.
The company spoke out after receiving formal opinion from a QC and off-the-record comments from the head of tax litigation at a Big Four accountancy firm.
Hudson Contract said the Chancellor’s directions to the Treasury on April 15 only include provisions to make payments to employees with a regular contractual income.
Despite what has been stated in the official guidance, there are no provisions to deal with the large numbers of people working under umbrella contracts, agency workers and those self-employed but taxed using PAYE due to IR35, onshore employment intermediaries or other legislation.
This means many firms will have incorrectly paid out money to workers based on official guidance and subsequent grant claims will be invalid and vulnerable to clawback by HMRC for the next five years.
It also means many temporary workers will now be left with nothing if their employers had waited to see the legislation before implementing the scheme.
Ian Anfield, managing director at Hudson Contract, said: “It is vital to keep money flowing to the self-employed construction operatives who are taxed under CIS and PAYE.
“Their significant contribution to the success of countless businesses should not be overlooked by policymakers and advisors at HMRC.
“We are hoping the directions can still be amended to include those without regular earnings even if the scheme has already gone live.
“Many have been waiting for support and will now be struggling to pay bills and buy food.”
Support for freelancers:
- Eligible freelancers can access the Self-employment Income Support Scheme. This allows the self-employed to claim a taxable grant worth 80 per cent of their trading profits to a maximum of £2,500 a month. More details can be found here.
- Freelancers can also delay making the second payment on account towards their tax bill due on July 31 until January 31 2021.
Support for SMEs:
- VAT-registered businesses can defer payments due between March 20 and June 30 without penalty or interest. Details here.
- Small and medium-sized businesses can access finance of up to £5 million from the Coronavirus Business Interruption Loan Scheme. Details here
- From the end of April, large businesses will be able to access loans of up to £25m. Details here.
