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Self employed but company director and being paid as an employee?
I have a client who was technically self employed but now has her own limited company although is getting zero income from it at the moment. She pays accountants to get paid via their payroll. Would this client be able to claim Universal Credit? Or are there rules stopping these type of workers from claiming UC? I also don’t think she would be able to get paid via the new income protection scheme as she is not technically an employee? Any thoughts would be much appreciated?
As far as UC entitlement goes, it doesn’t matter one jot if you are an employee, self-employed, a company director or whatever. Anyone of working age can claim (excepting more students and people ineligible due to residence/presence conditions).
Where these factors become relevant is when it comes to dealing with her income, as people in these situations might have different income flows depending on how they run their finances - and they might be affected by the MIF (although that has been temporarily suspended).
As to the income protection scheme, I have no idea. I think I am half remembering that it is possible in these situations for the company to pay things like SSP or SMP to the director and then re-claim some percentage of that payment from the government. I wonder if something similar might happen here - i.e. she continues to nominally pay herself a salary and then claims that back. But I am just guessing and I suggest that she asks her accountant!
As to the income protection scheme, I have no idea. I think I am half remembering that it is possible in these situations for the company to pay things like SSP or SMP to the director and then re-claim some percentage of that payment from the government.
I think it’s a long time since SSP was recoverable which is why government introduced the emergency scheme to cover SSP costs for two weeks if people self-isolate.
As to the income protection scheme, I have no idea. I think I am half remembering that it is possible in these situations for the company to pay things like SSP or SMP to the director and then re-claim some percentage of that payment from the government.
I think it’s a long time since SSP was recoverable which is why government introduced the emergency scheme to cover SSP costs for two weeks if people self-isolate.
Maybe I’m thinking of SMP? But as I say, I have no idea.
For Universal Credit purposes it’s likely that any separation between the director and the company will be ignored and she will be treated as if she were a sole trader, with all the company’s earnings attributed to her. See H4360 and following paragraphs here: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/787442/admh4.pdf
So fas as the Job Retention Scheme is concerned, her treatment may be completely different, and if she has been consistently paying herself a salary from her company she may be able to get HMRC funding to continue paying 80% of this. I think we’ll have to wait for the detailed rules of the scheme to come out.