What help is available for single contractors set up as limited companies?
It is common practice for individual construction workers to set themselves up as limited companies. Karen Davidson explains the support available during the coronavirus crisis.
If you are providing services through a personal services company, you could potentially be furloughed, and your company could seek assistance under the Coronavirus Job Retention Scheme.
All UK employers who operate a PAYE scheme and have furloughed employees are entitled to a grant, administered by HMRC, to reimburse 80% of wage costs for each furloughed employee up to a maximum of £2,500 per month, plus employers’ national insurance contributions and auto-enrolment pension contribution.
The scheme will be backdated to 1 March 2020 and is available for an initial three months (although may be extended). You would not be able to provide services through your personal services company during the period of furlough. Unfortunately, this assistance will only relate to the salary which you receive from your personal services company and not any dividends you typically receive.
The VAT payment deferral, the deferral of self-assessment income tax payments which would have been due on 31 July, and HMRC’s Time to Pay arrangements, will still apply and may provide some relief. In addition, it may be worth approaching your lender to see if your company is able to access funds under the Business Interruption Loan Scheme.