Can someone please explain the 80 per cent salary cover

[noFlowers]

Sorry if I'm being stupid but what does this mean!

Does it mean businesses who may lay off staff get 80% of staff salaries to pay them so they can still work.

Or does it mean you lost your job due to all this and you're at home and you get 80% of your salary.

What if you have a small limited company and are a sole trader? Do you still get some sort of government payment?

Butterfly - if the small limited company is set up to pay the sole trader as an employee (so runs a payroll for one person) then yes. If it's dividends instead then no.

@snorkelface thank you

Think of it as a retainer of your work shuts.

" Butterfly98 Sat 21-Mar-20 11:42:11

What if you have a small limited company and are a sole trader? Do you still get some sort of government payment?"
If you are a sole trader you do not have a company - the two are utterly different options.

If you mean what is you own a one person limited company then the company can apply if it has to lay you off but only for the PAYE salary the company is paying you as a director. I believe if you are only paid in dividends you will not be eligible.

Ah yes, Snorkel has said the same.

however the devil will be in the detail. Eg if directors of such companies today increased pay to £30k a year and started paying more income tax and NI to HMRC on that then it is possible you might be covered to claim £2k a month BUT if I were drafting the regulations which someone probably is day and night this weekend I would say it only applied to PAYE employees who were workingo n that basis on say 1 Feb 2020 and only at the salary level (not dividends) they were being paid on 1 Feb.

If you are a sole trader (so no limited company) as I am then the scheme does not apply so the gist is you get nothing now and you pay masses of tax next year to make up for what others are getting now I presume.

@xenia sorry meant to type sole director not trader! Thanks for the info though!

Also if you have premises (a shop, unit, garage etc) and pay business rates or get rate relief there are some other options too. If you're running your business from your spare room/mobile phone/email then those won't apply.

Pressure is mounting for the government to revisit the plans it announced yesterday so the self employed are better covered. It's finally made it on to the BBC News page and LBC this morning. Maybe they'll take note and there'll be further announcements, if not there's 5 million workers (because the self employed also work) and their families who've just been shafted.

Sole directors are likely to be in a much better position on this from sole traders. At present there is 100% certainly I am not within this. A sole director is usually a PAYE employee of their own company and that will be clear from the records sent to HMRC, his pay slips, P60s, annual tax return etc. The problem will be if he is paid very very little as wages and I bet the 80% subsidy will only apply to that element but still will be worth applying when the scheme is up and running if the person is laid off

BUT we need to look at the regulations because if a company lays off its only employee will HMRC accept that? I suppose you do not need any employees. Loads of companies I advise which are just starting out only have non exec directors and no one is an employee and that is lawful. Also the new rules are not about employees being sacked but just being idle, So I don't see why they cannot apply to sole directors of their own company who have much less work and are already paid under PAYE .

The problem will be if he is paid very very little as wages and I bet the 80% subsidy will only apply to that element but still will be worth applying when the scheme is up and running if the person is laid off

The devil is in the small print.
And yes - when will it apply from.
A person could set up a Company, set themselves up as the Director and pay themselves £30,000. Even if the company can't afford that salary.

It could go on the most recent submissions.

There will be a lot of people trying to 'game' this system - and you almost couldn't blame them.

It is not a loan. It is unprecedented.

When people are in lockdown as they will be soon, they will be spending less anyway.

Re self employed. When I was self employed it was drilled into me over and over again that I had to build up and then set aside a minimum 3 months pay to look after myself if I was unable to work for any reason.

Cashflow is now an issue though, I typically get paid at the end of a project, over got various things to invoice for in the next week for work done from the beginning of the year, and it's not clear how long it will take to get these or whether some organisations will collapse. That three month buffer can disappear quite quickly.

And I already took two months off recently to care for both my parents and whilst my DF was dying.

Perhaps the government wants to force all the self employed to operate as small business which employs them as one-man payroll employees, then forces the bigger businesses to turn those people into employees of the bigger businesses when the delayed IR35 crackdown happens next year. Shit, I've finally succumbed to conspiracy theorising!

Either way the government isn't showing much love for the freelance/self-employed (yet?)

Ha. At least they've postponed IR35, though that doesn't affect me either!

@StatisticallyChallenged
My problem with furlough is I have 12 duties each week to be covered. Each duty is 10 hours and 5 members of staff. Simple answer is 4 people on short time doing 3 duties each and one furloughed.
Except the furloughed one sits at home earning 80%, and the other 4 come to work and earn 75%!
I wonder if they could take it in turns to be furloughed? A week at a time maybe.
Anyone know if that's possible?

So nothing has been put in place for the people having to be at home for potentially 3 months with their kids? Unbelievable.

We're wondering that too Bookvan - do they have to be furloughed for the whole period? We're in a position where we may be able to offer some work sometimes, but nowhere near enough for everyone. It seems really unfair to make a small group work all the time, but we need to keep what we can going.

Bookvan - exactly!
Also the laid off colleagues at the moment have been given permission to take short term temp jobs, Some have started with Tesco etc. So if they are furloughed how on earth will that work.

I think those needing childcare may have to hire someone to come to their house to look after the children, even if that only leaves them a bit better off each day as at least it preserves your career.

If you are furloughed I suspect employers should look at whether they could instead of having people at home with their feet up getting paid they branch into something else - the school bus drivers you employ could be turned into delivering of food for the same company and that kind of thing just as some manufacturing companies are turning to making ventilaters, rather than paying staff to do nothing.

By the way anyone wanting a job the supermarkets appear to be hiring.

Just a plea ya he sensible. And not selfish.

Sorry. Wrong thread.
I did want to post on this one though!

Unfortunately the detailed info is not available yet so its virtually impossible to answer these questions. I imagine it will be released very soon as they need more businesses to close their doors ASAP but many arent as they are not certain yet if they can afford to.

This is really welcome news for small restaurant owners. We have 2 staff who have already been on reduced hours this week (and not actually needed but we got them in just to try and help them out by giving them a few hours) It's such a relief to know we can ask them to stay at home and they will get at least 80% of there wage packet.
We now have to make a decision on whether to give running a take away business a go (which has been barely 5% of our business in the past) with just me and my DH, or to shut completely until further notice and take advantage of the employee retention scheme. We take minimal salaries for the reasons mentioned above, so it's a question of whether it's better to take c£500 a month each from the scheme, or try and make a go of it, and hope we make enough a month to pay our normal small wage and top up the 20% for our 2 employees....

I think those needing childcare may have to hire someone to come to their house to look after the children, even if that only leaves them a bit better off each day as at least it preserves your career.
Childminders aren't working either so how do you do that ? . Even if I did this just so I can do my usual hours I'd be worse off as usually at school so I'm on less money and now childcare on top of that . Why would staying at home not preserve my career , we are in the middle of a pandemic , people are advised to stay home schools shut . what sort of employer is not going to understand that ? Please explain!

Does anybody know if this applies to those who are self isolating? I’m currently 6 months pregnant and my employers are being really obstructive about me working from home (Eventhough my job is all computer based and is easily done from home) - the only alternative is SSP and I really can’t afford to live on £380 a month :/