Grants Available for Contractors with Public Sector Engagements

August 07th 2020

We have reported repeatedly on the unpopular IR35 off-payroll rules that were introduced in the United Kingdom.  However, as a result of the Covid-19 pandemic there may finally be a positive side to this.

Employers are now entitled to claim a grant under the Coronavirus Job Retention Scheme including to pay contractors with public sector engagements who have been brought onto the payroll under the IR35 off-payroll working rules.  This includes agency workers under umbrella companies.

Employers can claim for any type of contract including full time, part time, agency, flexible and zero hour contracts including for foreign nationals who qualify to be furloughed.

The intention is that the government will cover up to 80% of wages of individuals who would have been laid off as a result of the Covid-19 crisis.  This originally ran from 1 March 2020 to 30 June 2020, but has been extended in phase two up to 31 October 2020.

It is a welcome change to see contractors afforded the same rights as employees and is a testament to the governments long awaited acknowledgement to the important part that they play in the modern day economy despite the lack of equality that they share with employees whereby they would have certainly been more at risk of being out of work without the additional benefits usually only afforded to more traditional employees.