Q&A: How you will be paid by government and where to find other financial support
PUBLISHED: 09:22 30 March 2020 | UPDATED: 12:06 06 April 2020
Business correspondent Eleanor Pringle answers your wage queries – whether you are self employed or work for a company – and how you can apply for extra financial support.
What is a furloughed worker?
A furloughed worker is someone who is in employment but is not undertaking work.
If you are working reduced hours, you are not eligible.
Employers will select which staff need to be furloughed for the prosperity of the business – however they must be able to prove that they have not been discriminatory when choosing which employees will fall into this category.
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Am I eligible, and what do I get?
Anyone on a PAYE scheme will be paid 80% of their salary up to £2,500 a month.
PAYE stands for Pay As You Earn, and is a code given by your employer to HMRC.
If you pay income tax and/or make national insurance contributions, you are on a PAYE scheme.
However some staff may have variable income. In this case, it is likely that this will be calculated from HMRC’s PAYE records.
Do I get it from the government or from my employer?
The initial 80pc of wages will be given to businesses directly by HMRC – so your pay will come from your employer as normal.
I was made redundant before this was introduced, am I covered?
At the moment that is not clear. Government guidance thus far has been that payments will be backdated until March 1 to cover pay for furloughed workers.
The Citizen’s Advice Bureau is advising people who were made redundant to appeal the decision to their former employers.
They say an appeal should raise:
• Now that the government has announced the Coronavirus Job Retention scheme, they can afford to pay you, so making you redundant was not necessary.
• The scheme means they can reverse your redundancy, treat you as a ‘furloughed worker’, and pay you.
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What are the provisions for self-employed?
The measures announced for self-employed people are a grant based on previous monthly earnings over the last three years. Similarly to PAYE employees, this is worth up to 80% and is capped at £2,500.
To be eligible, HMRC has said you must have annual “profits” of less than £50,000 in 2018-2019.
HMRC will contact eligible individuals directly.
When will I get the money?
Rishi Sunak has said that the aim for payments to be made is June. However this will be backdated to March 1 so could potentially be a sum of £7,500.
Until then Mr Sunak has advised people apply for universal credit, which could be paid within days of an application.
He added that the treasury had made universal credit more generous and that a family could receive as much as £1,800 a month in support.
Councils have also been given money to help with bills.
I haven’t got any tax returns, I’m a new freelancer, what do I do?
Unfortunately, you are not covered at the moment.
Rishi Sunak said in his announcement that the only way he could implement this support was to do it through historic HMRC tax returns.
As a result you must instead apply for universal credit.
If in previous years you have previously filed a HMRC tax return, but you haven’t done it yet for this year, you have four weeks to do it.
How to I claim Universal Credit?
You apply for universal credit online at www.universal-credit.service.gov.uk/postcode-checker.
You’ll need a form of identification, as well as your bank details, an email address, information about your housing and income, as well as details about savings and investments, plus how much you pay for childcare.
Is the grant taxable?
The chancellor said the grant was taxable.
When it comes to your next tax return, the likelihood is that if by then you have returned to earning a decent sum, then some of the grant will be taken back through the tax system.
I’m registered as a PSC (personal service company) – but it’s just me. What do I do?
The treasury has advised that people who pay themselves a salary and dividends through their own company are not covered by the self-employment scheme. However, they will be covered for their salary if they are operating PAYE schemes - even if just for themselves - and will be covered.
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