Hudson Contract has warned that temporary construction workers are being shut out of the government’s Coronavirus Job Retention Scheme
The government’s Coronavirus Job Retention Scheme went live today (20 April), with businesses able to claim up to £2,500 a month towards staff wages.
The job retention scheme, announced by chancellor Rishi Sunak as part of a package of support to protect jobs and businesses, allows employers to claim for a cash grant of up to 80% of a furloughed employees wages, capped at £2,500 a month.
Last week the Sunak announced the scheme will be extended for a further month until the end of June, to reflect continuing COVID-19 lockdown measures.
Temporary construction workers shut out
However, Hudson Contract has warned that temporary construction workers are being shut out of the government’s supposedly wide-reaching Coronavirus Job Retention Scheme.
Hudson Contract spoke out after receiving a formal opinion from a QC and off-the-record comments from the head of litigation at a Big Four accountancy firm.
Hudson Contract said the chancellor’s directions to the Treasury issued at 1.46 pm on 15 April 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, according to Hudson Contract.
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: “The lack of support for temporary workers in the Coronavirus Job Retention Scheme raises serious questions about the much-awaited self-employed assistance scheme due to be up and running in June.
“There is a huge difference in scope and value between the directions and the impression given by the published guidance and anyone with experience of tax litigation will know the guidance is not binding and cannot be relied upon for anything.”
‘A scheme that supports all PAYE workers’
Hudson Contract has made strong representations to HMRC to design and implement a scheme that supports all types of PAYE workers.
Anfield added: “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 who work in industries hard hit by coronavirus such as tourism, hospitality and, more to the point, construction have been waiting for support and will now be struggling to pay bills and buy food.”
I’m one of thousands of people who have been left stranded without help from the government scheme.
I’ve been CIS self employed since 15/16. I’ve paid my taxes and NI through my returns submitted by my accountant. For the year 18/19 I had to submit my return online for the first time. It’s a complete minefield, I spent 3 days going through it.
I never recieved a letter from the HMRC to say I was getting paid the SEISS, I wasnt aware they were sending letters out. I thought you just checked online on or after 13 May.
When I tried this it stated I was ineligible? I didn’t understand, so I contacted HMRC on 2 occasions and was told after looking at my figures I should be entitled to it, it must be a glitch.
I eventually spoke to an officer who investigated further, and found that I had submitted my 18/19 return under PAYE self employment by mistake. She could see I payed 20% on all my earnings and class 2&4 national insurance contributions through my return. As PAYE the tax and ni would be taken out throughout the year. She advised me to edit my return and offered to do it for me and told me it was still within the timescale. I gladly accepted her help.
Now after 6 weeks of contacting the HMRC they are saying that because my 18/19 return was edited after 24th March my claim would not be taken into account? The government policy which prevents anyone getting the SEISS who have changed there returns is put in place to prevent fraud, which I completely understand, but it also ties the hands of the HMRC from helping people like me who genuinely made a small error on my return.
I contacted my local MP’s about this but have yet to hear back. One of the HMRC managers I spoke to said there are hundreds of cases like mine. There are so many petitions online that call for this to be looked at.
Surely the HMRC should be able to look at individual cases and treat them accordingly to there tax return figures. It would make it more fair and simple.
I have been able to work for 4 weeks only since the end of February due to the covid crisis, I’ve received no help and I’ve had to break into my savings planned for reinvestment for the coming year.
Please raise this issue I feel as though I’m stuck between a rock and a hard place over this