Umbrella Companies | Furloughed? Or Not? It’s Still All Up in the Air

Furloughed? Or Not? It’s Still All Up in the Air

Yes, despite being months into lockdown, news reaches us here at UCHQ that for many of you, you are still not seeing any money coming in from the Coronavirus Job Retention Scheme, despite being unable to work for some months now.

While any clarity from the government about exactly how furloughing should work for Umbrella Companies employees has been sketchy, to say the least, we understand that under the terms of the CJRS, if you are employed by an Umbrella Company, you are considered to have an employer/employee relationship and as such, you should be eligible to be furloughed.

Not only that, but we also understand that commission is being considered by some umbrella company providers when making furlough pay calculations. This is particularly important for those who use an umbrella company to pay a small basic salary and take the rest in commissions and bonus payments.

Of course, any furlough payments are subject to the £2,500 monthly cap, so if you were raking it in beforehand, we hope you had managed to save some money, to be able to reconcile any differences and pay cuts that may have come about.

But the main problem faced by umbrella company workers appears to be that the lack of government guidance and clarity has meant that some umbrella company providers are still reluctant to pay the 80% average pay to contractors, because they are unsure that they will be able to reclaim the money from HMRC.

It does seem obvious to us that the vast majority of umbrella company employers are actively doing all they can do to support you all and that they aren’t just deliberately going out of their way to refuse to help or pay contractors, but the lack of clarity is definitely hampering the support they have been able to offer.

Unfortunately, it’s not just the contractor industry that is suffering from a lack of clarity. And we can’t really accuse HMRC of being deliberately slow. These are unprecedented times and guidance is constantly changing and evolving as new issues reveal themselves. We do believe that they are genuinely working as quickly as they can, but we would still like to see some definitive guidance for umbrella companies to be forthcoming.

The only good thing to come out of all this so far is that the dreaded IR35 policy has been deferred until at least April of next year, which hopefully gives everyone time to work to change it before it gets pushed through, and now that remote and freelance working is looking to become a large part of the new normal, that more is done to support, not obstruct, freelance and gig economy workers.

If you are still waiting on your umbrella company for CJRS payments, we suggest you do a few things. Firstly, keep on at them. Be a pain in the ass. Show them examples where other umbrella company providers have led the way.  Speak to HMRC. Speak to Citizens Advice. Also take a look at what the government BEIS department are doing (Business, Energy and Industrial Strategy), as they seem to be leading the way with delivering the guidance.

Keep fighting and let’s all just hope that the worst is over for all of us.

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