Who should furlough me?

Juliem21

I’m currently employed to provide 18 hours work per week to a local authority in the Midlands (or at least was until 30th March).  My work is contract work for which I’m paid an hourly rate. The authority pay my employment agency for the hours I’ve worked.  I submit a claim for those hours to a third party umbrella company which deals with paye tax, national insurance etc on my behalf.  I pay the Umbrella company a flat fee for their services of providing my wage slip & dealing with tax national insurance etc.  My questions are 

1 can I be furloughed? 

2 who would furlough me - the local authority, the employment agency or the umbrella company that deals with my paye?

For the time being I have approached the Local Authority to ask if they would furlough me.  They are reluctant to do so even though my work has been suspended as a direct result of Coronavirus (I had a verbal agreement that my contract would be renewed until 31st March 2021 and even had work programmed in to my diary for the whole of April 2020) and they have written to say they want me to return to work once the crisis is over.  Any advice would be appreciated - Thank you.

Galloglass

The furlough scheme is not available to the public sector so the option of the LA furloughing you is not available.

You've a very odd situation as you appear to be a contractor to the Employment Agency and not an employee of that Agency. Why did you chose this method?

sharpe106

Probably tax benefits. 

Galloglass

Umbrella companies / tax reduction is not my area so am struggling (as a simple engineer) to understand why people go to such lengths, but they do - 625,000 people.

This article implies that the Umbrella company can furlough but the killer is the cash flow issue which is the same for any organisation (like Agencies) which have a high employee cost element. You should get advice from your UC (£) or a related trade association (£) or a tax accountant (£££)

https://www.fcsa.org.uk/will-the-coronavirus-job-retention-scheme-apply-to-umbrellas/

Andy_L

Galloglass said:

The furlough scheme is not available to the public sector so the option of the LA furloughing you is not available.

Yes it is, however:
"The government expects that the scheme will not be used by many public sector organisations, as most public sector employees are continuing to provide essential public services or contribute to the response to the coronavirus outbreak."

https://www.gov.uk/guidance/claim-for-wage-costs-through-the-coronavirus-job-retention-scheme

LilElvis

Galloglass said:

Umbrella companies / tax reduction is not my area so am struggling (as a simple engineer) to understand why people go to such lengths, but they do - 625,000 people.

This article implies that the Umbrella company can furlough but the killer is the cash flow issue which is the same for any organisation (like Agencies) which have a high employee cost element. You should get advice from your UC (£) or a related trade association (£) or a tax accountant (£££)

https://www.fcsa.org.uk/will-the-coronavirus-job-retention-scheme-apply-to-umbrellas/

Some aren't given a choice. God-daughter is a locum veterinary nurse via a couple of different agencies and all of them gave her two options - be self employed or be paid through an umbrella company, with no choice to be paid PAYE directly by the agency. She isn't saving any money by opting to be paid via an umbrella company (she decided she didn't want the hassle of sorting out accounts etc associated with self employment). In addition to the usual PAYE and employee's NIC she also has deductions for employers NIC and the "administration fees" levied by the payroll/ umbrella company. The payroll/ umbrella company is - surprise, surprise - related to the agency so they make money from both the veterinary surgeries she works for and also from her via the administration fees they deduct from her.

Galloglass

The payroll/ umbrella company is - surprise, surprise - related to the agency so they make money from both the veterinary surgeries she works for and also from her via the administration fees they deduct from her.

Never knew that. Can see this whole Agency area coming under a lot of scrutiny in the future as employment lawyers work out if people were actually self-employed or really surrogate employees of the Agencies' clients..