Source · Select Committees · Public Accounts Committee
Recommendation 7
7
Following our evidence session HMRC added that people with more than one employment can be...
Conclusion
Following our evidence session HMRC added that people with more than one employment can be furloughed simultaneously by different employers and that eligible employees can be on any type of employment contract, including “IR35, umbrella company and agency working”. With the CJRS extension, the cut-off date has moved from 19 March to 30 October and the requirement to have been previously furloughed has been removed. Some people are ineligible for CJRS or SEISS because of policy choices, for example, it was decided that self-employed people with profits over £50,000 would not qualify for SEISS. HMRC added that, in other instances, the design of the tax system and operational constraints have meant that it had been unable to deliver help at speed and with manageable error and fraud risks. For example, the most recent complete set of self- employment data held by HMRC is for the 2018/19 tax year, meaning that the Department did not have up to date data which it could have used to determine SEISS entitlement for everyone who started self-employment more recently.20 HMRC confirmed to us that it has no plans to do further work on new schemes for people who have not been able to benefit either from the CJRS or the SEISS measures.21 Lack of certainty about the support schemes
Government Response
Acknowledged
HM Government
Acknowledged
1.1 The Government agrees with the Committee’s recommendation. Recommendation implemented 1.2 Following the Committee’s COVID-19: Support for Jobs report, HM Revenue & Customs and HM Treasury wrote to the Committee on 2 February 2021 responding to recommendation number 3 (that HM Treasury and HMRC should investigate whether more data within and outside the tax system could be used to determine eligibility for currently excluded groups), setting out reasons why certain groups have not been eligible for support. 1b: PAC recommendation: and HMRC should, within six weeks of this report consider the support it can provide for those taxpayers that have, due to the IR35 rules, moved onto payrolls and missed out on support from the COVID schemes, for example, by reviewing whether it can use an average of wages in the past three years to determine grants. 11 1.3 The government agrees with the Committee’s recommendation. Recommendation implemented 1.4 The off-payroll working (IR35) rules can apply if an individual provides their services through their own limited company. These rules do not prevent anyone from continuing to work through a limited company or require individuals to move onto payroll. They simply ensure that those working like an employee through a limited company pay broadly the same tax and National Insurance contributions (NICs) as if they were employed directly. However, the government is aware that some client organisations have chosen to offer contractors employee positions on payroll. 1.5 To ensure an acceptable level of fraud risk and to mitigate vulnerability to criminal attack, without compromising the speed at which the department need to pay out, the Coronavirus Job Retention Scheme (CJRS) is based around the principle that data submitted by claimants must be able to be matched against verifiable data already held on HMRC’s systems. This is assessed using employer PAYE Real Time Information (RTI) submissions to HMRC, which allows HMRC to verify claims in the most efficient and timely way, ensuring payments can be made quickly while reducing the risk of fraud. 1.6 For the first six months of the CJRS, employees were eligible if they were on-payroll the day before the scheme commenced on 20 March 2020. In October 2020, the CJRS cut-off date was moved to 30 October 2020, meaning that many more individuals are now eligible for support, including contractors moved onto payroll earlier in the year in anticipation of the off-payroll reform. 1.7 The rules on calculating entitlement to CJRS were set to be consistent for all employees, and to move away from this would complicate the scheme and increase the burden on employers.