COVID-19 – Charities and Public Sector Contingent Workers
On the 8th of April 2020 The Chancellor announced a £750million support package for UK Charities to ensure that they can continue to work through the COVID-19 outbreak. This package will help to support hospices and charities caring for people suffering from domestic abuse.
£360 million of this will be paid direct from government departments and £370 million will be paid to smaller charities through a fund paid directly to the National Lottery Community Fund. The Government will donate a minimum of £20 million to the BBC’s Big Night in fundraiser later in the month.
Charities can also benefit from the already announced VAT deferment payments, furloughing staff and the business rates payment holiday for the next twelve months.
The Government has acted to allow Contingent Workers who provide their services to the Public Sector to Central Government Departments, Executive Agencies and Non-Departmental Public Bodies through an umbrella company, a personal service company or who are PAYE to receive COVID-19 Income Support.
This will mean that these workers will be able to be paid 80% of their pay up to a maximum of £2500 per months. This can be backdated to the 1st of March 2020 and will apply to workers that are unable to work because of the COVID-19 outbreak or for workers that are self-isolating as required by the Government guidance.
This is no doubt a welcome development since it is helping workers who are providing front line services during the COVID-19 outbreak. But also form the point of view that it allows for the payments of £2500 per month to workers providing their services through a personal services company.
These contingent workers that work through their limited companies will usually have one director who will be taking remuneration by way of wages, dividends and expenses. We hope that there is an announcement for small company directors who also in need of the same financial support during this difficult time who are also having to close their business as part of the COVID-19 emergency.