Cancel car ins?, furlough & self-emp news, Ryanair farce, Prem Bond boost, student loan & Covid, tighter credit scores

Martin's coronavirus update
21 NEW need-to-knows, incl: 
Furlough extension | Self-employ date | Tighter credit scores | Ryanair refund farce | Student loan update | Car finance & payday loan pay holidays | Fixed-term contracts... and more
 

It seems hard to believe, but a month ago, we weren't even locked in. The Chancellor foreshadowed the cataclysmic impact on the economy by announcing megalithic support measures. This week, the first got up and running - the furlough scheme's live.

No surprise it's had tweaks and changes - some good, others not. The team and I have been hard at work assessing and analysing it, and I've had many calls/emails trying to get clarification and even help smoothing out a few wrinkles, though bigger change is hard.

As always, everything we've learnt goes in our guides. Last week there were four - now that's split into six, as they keep growing...

1) Furloughing is live and now lasts until June. Since Mon morning, employers have been able to apply for the Coronavirus Job Retention Scheme (CJRS). Those that do it by the end of today (Wed) should receive the money this month, as it's due to be paid within 6 working days (see when will I be paid?)

The CJRS allows firms to choose to put employees with no work or who can't work on furlough - like a job standby button - and the state pays 80% of salary, up to £2,500/mth max. Employers can backdate claims to March, and it'll last until June (extended last week, from the original March to May). Furlough needn't last the whole time - it's for 21+ days. If you're discussing it with your employer, to tool yourself up, use my simple, updated cheat sheet: 11 simple furloughing need-to-knows for employees.

2) CONFIRMED. Self-Employed Income Support notification due mid-May. Now the employees' furlough scheme is open, I've had many questions about the Self-Employed Income Support scheme timings. With it, rather than applying, you're contacted if you're eligible.

To manage your expectations, I asked HMRC, and it's confirmed you should expect contact mid-May (it's not yet decided whether by letter, online or a combination, I'll let you know) and payment will be in June.

Many also ask me: "Will it be extended to 4mths like the employee scheme?" I've heard nothing, but my inkling is there's a good chance they will do it in parallel with the furloughing scheme. Though that was done at speed, to forestall firms starting redundancy consultations which need 45 days' notice.

PS: If you haven't submitted your (already very late) 2018/19 tax return, you must do it by THIS THU to be eligible for the Self-Employment Income Support scheme. See self-assessment help, or the charity TaxAid can give personal help to those on low incomes.

3) Limited companies - no change I'm afraid. I know many who work via their own small limited co are struggling, as there's little support. There are campaigns to change that, but no news I'm afraid. All I can do is link again to my limited co directors tips & wriggle room video.

4) Paying interest on debts? APPLY ASAP to cut interest - our new data shows acceptance is rapidly getting tougher.  While those in dire straits can get can a credit card or loan payment holiday, only do that in an emergency, as it still leaves interest racking up.

If you've manageable existing debt, ensuring the interest rate is as low as possible is the key. Yet we've crunched some eligibility data and it shows far fewer people getting accepted for cheaper debt. Likely a mix of tighter credit scoring, and people's worsening finances - in the short-term, things are likely to get worse not better, so sort it sooner.

- Credit cards: The number not eligible for any cards has jumped to 20% from 7%, while those offered at least one pre-approved card has dropped from a half to a third. So if you need to cut card costs, don't go direct - instead use the balance transfer eligibility calc to see which cards are likely to accept you (protecting your creditworthiness), and read the  Balance Transfer guide.

- Personal loans: The number not eligible for any loans has jumped from 3% to over 30%, a ten-fold increase, while those offered at least one pre-approved loan has dropped from 40% to around a quarter. To look at cutting loan costs, it's best to use the loans eligibility calc to see your likely acceptance, and see the  Cheap Loans guide.

5) The furlough cut-off date's been EXTENDED to 19 March, helping 10,000s new starters, but it's no panacea. Originally, when the furlough scheme was announced on 20 March, only employees on a firm's payroll by 28 February were eligible. A vocal social media campaign rightly launched collectively to fight for 100,000s who'd switched jobs since then, as by ill luck they were left out in the cold.

The Treasury seemingly listened, and last week extended the cut-off until 19 March, saying it was "expected to benefit over 200,000 employees". But sadly when examining the technicals, there's a hole, which by my analysis suggests that number's a wild over-estimation.

The problem is we now know what they count as being on the payroll. It isn't when you started work, but instead when your firm submitted its first Real Time Info (RTI) payroll details including you to HMRC - usually done a few days before each payday.

Staff who are paid weekly and started in early March are therefore eligible for furlough. Yet most people are paid monthly, and most paydays are near the month's end. So even for those who started on 1 March, the RTI data often wasn't submitted by 19 March deadline, so the extension doesn't help. Full help & analysis in my furlough cut-off date extension video.

6) Old employers can rehire to furlough, but the cut off date's still 28 February. If you were made redundant or left your old firm for a new job, which fell through due to coronavirus (ie, you didn't start, were put on unpaid leave or made redundant), you can ask your old employer to rehire and furlough you, but the cut-off date here hasn't moved, you had to be on the payroll by 28 February. Full help in how do I get my old employer to rehire and furlough me?

PS: On Fri, when new furlough guidance was published, it included that rehire and furlough was for "those made redundant or stopped working for employer after [28 February] and prior to 19 March 20". I was alerted to this by a kind employer, who'd been planning to help former staff, but this new 'must've left by 19 March' rule meant they couldn't.

So I had conversations with HMRC and I can happily confirm the guidance will be changed soon, and the new 19 March rule won't apply.

7) Newly self-employed? Help in Scotland. Those who started self-employment after April 2019 (and many even before that) aren't eligible for help (see the Chancellor's answer to my request to change that cut-off), leaving many in the lurch. Yet the Scottish Govt has announced a further £100m of support to help newly self-employed Scots.

8) Ryanair playing fast and loose (squared) with refunds - we've reported to Trading Standards and the CAA. You've a legal right to refund for cancelled flights, and while flight and holiday companies are making people jump through hoops to claim it rather than vouchers (ie, offering vouchers online, but you have to call swamped phone lines for cash refunds), Ryanair's gone one step beyond.

We've 100s of reports that after people have jumped through the hoops to claim cash not vouchers, they're still sent vouchers anyway. See full Ryanair refund farce news. We've reported this to the Civil Aviation Authority and Trading Standards.

12) Mortgage, credit & store card, personal loan payment holidays and 0% overdrafts. Just a reminder, if you've an authorised overdraft, you now have a right to ask that £500 of your overdraft is at 0%. Also, rules allow you to request mortgage payment holidays and credit & store card, loan & catalogue debt payment holidays.

13) Child at/going to uni and your income's substantially dropped? Let student finance know. First-time UK undergraduates are automatically eligible for a full loan to cover their tuition fees (watch my Student Loans Decoded prog for full info - for sixth-formers & parents).

Yet the amount of the maintenance loan, which covers living costs, is means-tested depending on household income, and those income forms are being completed by many right now. How it works exactly depends on which UK country the student is from...

- Eng: Higher income, less loan, implicitly suggesting parents should fill the gap - see our Parental Contribution Calc.
- Wales: Everyone gets the same amount. Higher income, more of it's a repayable loan, rather than a non-repayable grant.
- Scot & NI: It's a mix of grant, loan and implied parental contribution. Higher income, less grant, more loan & parental contribution.

For new and continuing uni students from September, the funding is based on information in the 2018/19 tax year. Clearly many people will have seen substantial income drops. If your income is at least 15% lower over this year, you can do a current year income assessment instead. For more, see coronavirus and students.

14) You can be furloughed on fixed-term contracts - even if that contract's ending or has ended, it can often be extended. If you're on a fixed-term contract, your employer can extend it within the furlough period, without breaking rules, so your continued employment can be covered.

However, if the contract's due to end soon, your employer needs to extend or renew it before it ends to keep you on the furlough scheme.

Firms can also rehire to furlough contractors. New guidance on this on Fri has muddied waters, so I've been in conversations with HMRC on this, and as part of that, it's told me the guidance will be updated, along these lines (I know in the TV industry this meant some firms felt they had to U-turn on rehiring. Hopefully this helps)...

"Employees on fixed-term contracts notified to HMRC on an RTI [payroll] submission on or before 19 March, which ended after 19 March, can be re-employed and furloughed by their employer. Their contracts can be renewed or extended before their natural conclusion during the furlough period without breaking the terms of the scheme.

"Employees who were on fixed-term contracts as of 28 February, whose employment was notified to HMRC on an RTI submission by then, but whose contract ended after 28 February, can also be re-employed in the same way." See fixed-term contractor help.

15) I'm not dead - beware coronavirus scams.  Sadly, this week many of you have seen adverts about my death online in publications such as the Guardian, Metro and others. These are click-bait ad scams, placed on Google and others, which are then published via ad software on legit sites. Clearly, as I'm writing this, they're fake. Please report any you see.

But that's just one of many attempts to scam the vulnerable during coronavirus, from sophisticated text message fraud to dodgy driveway cleaning services - we've 15 coronavirus scams to watch out for.

16) CONFIRMED. Sales commission that's in your contract counts towards furlough pay. Last week, I told you I thought it counted but I'd asked HMRC for official confirmation. That came on Fri. In a nutshell, if you're contracted to get extra money, eg, some sales commission, fees or guaranteed overtime, it should count towards your salary when the 80%, up to £2,500/mth, is being worked out.

However, if it's discretionary commission, such as tips, 'tronc' or bonuses, it's not included. Full info is in How is 80% of my salary calculated?

17) If you take a holiday firm's voucher refund, are you protected if it goes bust? If your holiday's been cancelled you are legally entitled to a refund (see coronavirus holiday refund rights). Yet online many firms are pushing vouchers, and making you hold in long telephone queues to request cash refunds.

You may be willing to take a voucher, to help the struggling travel industry out, or if you just can't face pushing to get cash. But if you have a voucher, what happens if the firm goes bust? 

- Refund credit notes: Issued for some ATOL-protected package hols and flight-only booking refunds, these will likely offer ATOL insolvency protection, so you'd likely get a full refund (though it's a new protection, so it's not been 100% tested).
- Other vouchers: These aren't protected if the firm goes bust - legally you'd just be a creditor. Though I suspect, and the Financial Ombudsman agrees, it'd be worth trying cover via your card provider under chargeback or Section 75 rules. But this is untested.

18) I'm on tax credits/housing benefit etc, should I switch to the boosted universal credit? Universal credit (UC) payouts have been increased by £1,000/yr since coronavirus, and the housing allowance for private renters is more generous. Many existing benefit recipients are still on the old system, so is it worth switching to UC? There's no hard answer - for many, payouts are similar, but:

- Some are better off, eg, some renters and/or disability benefit recipients.
- Some are worse off, eg, if you've £6,000+ saved, or couples where one is above state pension age.

For more info, including our free tool to help, read our new Will I be better of switching to universal credit? info. Then if UC is better, you can do it online or call the helpline.

19) Nursery support less than expected - likely to hit staff & fees. It had been thought nurseries could furlough all the staff needed. On Fri, new guidance stated, in simple terms, nurseries can only get furlough funds for the proportion of income that's not publicly funded.

As many nurseries already get (and continue to receive) funds from the state to cover 3-4yr-olds, this is a big late change, especially for those who'd already furloughed most of their staff, causing added pressure. For more, see nursery furlough. Some in the industry fear up to 1 in 10 staff may lose jobs and providers may shut or hike fees.

20) Supply teachers are only getting 80% of minimum wage. Supply teachers working for agencies and umbrella companies are often paid minimum wage plus discretionary bonuses (to allow flexible pay rates depending on the job). As discretionary bonuses aren't included in furlough pay, many firms are therefore basing the 80% of salary when furloughing on just the minimum wage.

Being straight with you, I'm talking to HMRC about this, which essentially says "it depends on the contract", though some lawyers tell us while called 'discretionary' bonuses, they're not really discretionary so should be included. We've not got anywhere yet though - I'll keep on it, and any updates will go in supply teacher help when I get them, and of course in this email.

21) Annual leave DOES accrue during furlough. Those on furlough remain employed, and annual leave accrues. Good news for most, but it does put some employers off furloughing people rather than redundancy, as it essentially leaves a cost accruing.

While there's nothing in the furlough rules to prevent you agreeing to vary holiday terms with your employer, employment law means the minimum 28 days a year (20 days + 8 bank hols) can't legally be waived, only extra allowances above that. More in furlough & annual leave.

Now EVERY Thu at 8.02pm on ITV for the next 5 weeks

It's my Thursday briefing - everything you need to know on coronavirus and key MoneySaving - plus answering your questions live, straight after the NHS clap on Thursday night. And it's from home, and Mrs MSE's kindly guest-producing, so I'll see what I can rope her into doing. Do watch or set the VideoPlus.