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What about office holders?

Office holders who provide services under an intermediary (such as a service company consultancy agreement) and whose services relate to the office held, would fall under the IR35 regime and must be assessed accordingly.

Related FAQs

Who is responsible for arranging the remote hearing in COP matters?

Where one or more of the parties is represented, responsibility for making the arrangements for the remote hearing will fall on either the applicant or the first represented party. If no party is legally represented, the court office will contact the parties to explain that the hearing will be held by telephone conference and will send them instructions on how this is to be achieved.

All remote hearings must be recorded. The responsibility for arranging the recording will be addressed on a case by case basis.

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Does an employee who is furloughed lose his/her benefits under an EMI share option?

One of the key legislative requirements of EMI is that the employee satisfies the working time requirement, which is that they work at least 25 hours per week in the company or, if less, 75% of the employee’s total working time. If the working time requirement ceases to be met, then there is a “disqualifying event”. That means that the tax benefits of EMI ceases. It may also mean that the option lapses, but that depends on the specific terms of the option.

An employee who has been furloughed is by definition no longer working 25 hours/week and therefore on the face of it, there is a disqualifying event. However, the Government has tabled an amendment to the Finance Bill currently going through Parliament providing in effect that time not worked because an employee has been furloughed counts as working time, both for determining whether the working time requirement is met initially and whether there is a disqualifying event. Provided this amendment is enacted, this should address the issue.

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My business has a contract with a public sector body – what guidance has the Government issued about payment under contracts between public and private sector bodies?

The Cabinet Office has published a helpful Procurement Policy Note (“PPN”) on relief available to suppliers due to Covid-19 (available here). This can include making advance payments to suppliers, if necessary. The PPN sets out actions that public sector bodies should take (until at least 30 June 2020) to ensure continuity of service and to ensure that its suppliers can resume normal contract activity once able to.

The actions public sector bodies should be taking include:

  • Informing its suppliers (that they believe are at risk) that they will continue to be paid as normal until the end of June 2020 (even if service delivery is currently interrupted). Risk might include supply chains collapsing and/or significant financial implications for a supplier
  • If a contract involves a payment by results mechanism, basing payments on previous months (e.g. the average monthly payment over the previous 3 months), and
  • Ensuring that invoices submitted by suppliers are paid immediately to maintain cash flow in the supply chain and help to protect jobs.

If you are a supplier to a public sector body, you must act transparently and on an open-book basis, making cost data available to your public sector clients. You must also continue to pay your employees and subcontractors / suppliers. Suppliers to the public sector must not expect to make profits on any undelivered elements of a contract. The PPN makes clear that, should suppliers be found to be taking undue advantage, or failing to act transparently, a public sector body can take action to recover payments made to that supplier.

The PPN requires public sector bodies to urgently review their contract portfolios and take steps to support suppliers who they believe are “at risk”. However, no definition of “at risk” is given in the document.  We would suggest that if you are a supplier and you have yet to hear from a public sector client, you should seek to get in touch with them as soon as possible, particularly if you have concerns about your supply chain, staff retention and/or are experiencing financial difficulties currently. Given the requirement for transparency, you may be required to provide evidence, so it may be helpful to have any relevant documentation ready to send, if necessary, as this may help ensure a decision is made by the public sector client more promptly, particularly as the public sector body may have a number of contracts to consider.

 

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Unpaid leave and sabbaticals

Employees will be reluctant to take unpaid leave or a sabbatical but when faced with the alternative prospect of redundancy may give it some serious consideration. This would remove the cost of that employee from the employer’s business for an agreed period of time. This is an option which can be offered to employees but again, imposing it without agreement creates significant risk.

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VIDEO EXPLAINER: Removing healthcare workers from the front line – the dos and don'ts

Specialist healthcare lawyers from Ward Hadaway ran a free webinar looking at the practical and legal considerations if required to treat healthcare workers from a BAME background or other vulnerable groups differently in the fight against the Covid-19 pandemic.

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