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What are the additional costs for the end user if the contractor is deemed employed?

The immediate impact is accounting for payroll purposes for the additional cost of 13.8% employers NIC’s and 0.5% apprenticeship levy on top of the payment to the contactor’s PSC.

Secondary NIC’s cannot be recovered from payments due to employees and the same applies under the new IR35 regime. However, new terms can be agreed with reduced level of fees to reflect this additional cost.

Related FAQs

Should I pay my apprentice to continue training?

Employers should ensure that apprentices are paid at least the Apprenticeship Minimum Wage, National Living Wage or National Minimum Wage (AMW/NLW//NMW) as appropriate (and taking into account the new rates which will take effect from 1 April 2021) for training carried out where their wage received through the Coronavirus Job Retention Scheme does not cover this.

Can employers reduce their pension contributions?
  • Yes, if contributions to a defined contribution (“DC”) scheme exceed statutory minimum for auto-enrolment purposes, it may be possible to reduce employer contributions to the statutory minimum, but not further.
  • However, the processes required for reduction of DC employer contributions will necessitate obtaining legal advice:
    • Reducing employer contributions may require changes to the employment contracts of affected staff (as does the furlough process).
    • Reducing employer contributions may also require negotiation with trade unions or other staff representative forums.
    • Where group personal pensions are used, the contractual format may not permit changes of employer contributions, and hence it may also be necessary to enter into a new contractual arrangement. Choosing a new group personal pension plan is a not insignificant task in itself.
    • Employers with at least 50 employees are required to conduct a 60-day consultation process with affected employees if they propose to reduce employer contributions (but please see below).
    • Finally, it may require a change to the scheme rules and engagement with the scheme trustees if the scheme is operated under trust.
  • For DB schemes, specific considerations apply (see the last section, below).
The Government

Government’s Covid-19 landing page

https://www.gov.uk/coronavirus

Covid-19 recovery strategy

https://www.gov.uk/government/publications/our-plan-to-rebuild-the-uk-governments-covid-19-recovery-strategy

Working safely during Covid-19

https://www.gov.uk/guidance/working-safely-during-coronavirus-covid-19

Working safely during Covid-19: construction and other outdoor work

https://www.gov.uk/guidance/working-safely-during-coronavirus-covid-19/construction-and-other-outdoor-work

Working safely during Covid-19: factories, plants and warehouses

https://www.gov.uk/guidance/working-safely-during-coronavirus-covid-19/factories-plants-and-warehouses

Working safely during Covid-19: labs and research facilities

https://www.gov.uk/guidance/working-safely-during-coronavirus-covid-19/labs-and-research-facilities

Working safely during Covid-19: offices and contact centres

https://www.gov.uk/guidance/working-safely-during-coronavirus-covid-19/offices-and-contact-centres

Working safely during Covid-19: other people’s homes

https://www.gov.uk/guidance/working-safely-during-coronavirus-covid-19/homes

Working safely during Covid-19: restaurants offering takeaway or delivery

https://www.gov.uk/guidance/working-safely-during-coronavirus-covid-19/restaurants-offering-takeaway-or-delivery

Working safely during Covid-19: shops and branches

https://www.gov.uk/guidance/working-safely-during-coronavirus-covid-19/shops-and-branches

Working safely during Covid-19: vehicles

https://www.gov.uk/guidance/working-safely-during-coronavirus-covid-19/vehicles

Business support: loans, tax relief and grants for businesses, employees and self-employed people

https://www.gov.uk/coronavirus/business-support

Education and childcare

https://www.gov.uk/coronavirus/education-and-childcare

Housing and accommodation: renting: guidance for landlords, tenants and local authorities

https://www.gov.uk/government/publications/covid-19-and-renting-guidance-for-landlords-tenants-and-local-authorities

Housing and accommodation: moving home

https://www.gov.uk/guidance/government-advice-on-home-moving-during-the-coronavirus-covid-19-outbreak

Housing and accommodation: planning inspections

https://www.gov.uk/guidance/coronavirus-covid-19-planning-inspectorate-guidance

Healthcare workers, carers and care settings: NHS guidance for people working in healthcare

https://www.england.nhs.uk/coronavirus/

Healthcare workers, carers and care settings: PPE hub

https://www.gov.uk/government/collections/coronavirus-covid-19-personal-protective-equipment-ppe

Healthcare workers, carers and care settings: adult social care guidance

https://www.gov.uk/government/collections/coronavirus-covid-19-social-care-guidance

Healthcare workers, carers and care settings: shielding and protecting people who are clinically extremely vulnerable

https://www.gov.uk/government/publications/guidance-on-shielding-and-protecting-extremely-vulnerable-persons-from-covid-19/guidance-on-shielding-and-protecting-extremely-vulnerable-persons-from-covid-19

Healthcare workers, carers and care settings: adult social care guidance

https://www.gov.uk/government/collections/coronavirus-covid-19-social-care-guidance#guidance-for-unpaid-carers

Healthcare workers, carers and care settings: health, care and volunteer workers parking pass and concessions

https://www.gov.uk/government/publications/covid-19-health-care-and-volunteer-workers-parking-pass-and-concessions

International travel and immigration: travel advice for British citizens travelling abroad

https://www.gov.uk/guidance/travel-advice-novel-coronavirus

International travel and immigration: foreign travel advice for each country

https://www.gov.uk/foreign-travel-advice

International travel and immigration: waiting to return to the UK

https://www.gov.uk/guidance/coronavirus-covid-19-staying-where-you-are-if-you-cannot-return-to-the-uk

International travel and immigration: essential international travel guidance

https://www.gov.uk/guidance/coronavirus-covid-19-essential-international-travel-guidance

International travel and immigration: advice for UK visa applicants and temporary UK residents

https://www.gov.uk/guidance/coronavirus-covid-19-advice-for-uk-visa-applicants-and-temporary-uk-residents

Government’s financial support for businesses

This page help businesses find out how to access the support that has been made available, who is eligible, when the schemes open and how to apply.
https://www.businesssupport.gov.uk/coronavirus-business-support/

Rishi Sunak

The Twitter feed of the Chancellor of the Exchequer, where he has published various responses to some FAQs from the public.
https://twitter.com/RishiSunak

Who is expected to be principal accountable person in local authorities who are landlords of high rises?

This will be dependent upon the how the leasehold structure is set up for each relevant building, but it may be the local authority. We would be happy to provide further advice in relation to specific buildings if you contact us separately with the relevant details and documents.

How should we deal with existing petitions already presented at court prior to 27 April?

You should speak to your advisors. We do not know presently how existing petitions will be dealt with by the Court. We do know that if any winding up order is made (based on a petition presented after 27 April), it could be found to be void and a creditor may face challenges. Even for petitions presented before 27th April, there is a risk that the Court will not be keen to make a winding up order so it is important that you look at the facts of your debt and weigh up all of the factors before deciding how to proceed.