What is the new process for assessing status under IR35?

To facilitate social distancing the Home Office has stated that as of 30 March 2020, the following are permitted:

• The RTW check can now take place over video call.
• Job applicants no longer have to send original documents but can send scanned copies or photos to the employer.
• Where the job applicant cannot provide these documents, employers can use the Employer Checking Service and if they have the right to work, then the employer will receive a Positive Verification Notice which will provide the employer with a statutory excuse for 6 months.

These adjustments remain in place until the Home Office confirms otherwise.

The Commission has provided guidance as to measures which Member States can introduce without notification. These include:

• Measures which apply to all businesses within a Member State (for example the furloughing measures introduced by the UK Government)
• Measures providing support direct to consumers
• Measures which are already exempt from the notification requirement (discussed further below).

To respond to the crisis the European Commission has also issued a temporary framework to provide a basis for emergency aid to be notified for approval. The framework is initially in place until 31 December 2020. The Commission continues to keep this under review and has twice widened its scope to allow more types of aid to be notified. The type of measures covered include:

• The provision of guarantees (including guarantees for 100% of loans)
• The provision of loans at low interest rates, at zero interest rates or subordinated to senior debt
• Measures to support liquidity needs or to alleviate difficulties caused by the current crisis
• Measures to recapitalise businesses
• Measures to assist sectors hit particularly hard by the current crisis (eg transport)
• Measures targeted at COVID-19 such as research and development or production of products related to tackling the virus

The Commission has approved a UK Government “umbrella” notification to allow UK public authorities to adopt the measures permitted by the Commission framework. Therefore public authorities in the UK can use the Framework without notifying individual measures or schemes to the Commission.

We have developed a toolkit to assist with compliance. The Toolkit contains a specimen contract; detailed guidance; step by step guides and flowcharts; details of the factors to take into account for the status determination test; procedures for challenging the determination; and standard letters for the process.  Click here to fill in a form and register your interest in the Toolkit, which contains:

1. Detailed guidance in the form of Key Facts
2. Employment status checklist
3. Employment status assessment flowchart
4. Status questionnaire and guidance
5. Letter confirming self-employed status (agency)
6. Letter confirming employed status (agency)
7. Letter confirming self-employed status (direct with PSC)
8. Letter confirming employed status (direct with PSC)
9. Status disagreement process guidance
10. Status disagreement process flowchart
11. Letter confirming outcome of status disagreement process
12. Consultancy agreement

The parties to litigation should still take the steps they have been ordered to take and comply with any Orders made by the court. If for any reason it looks as if a direction cannot be complied with because of the Covid-19 virus then an extension of time can be agreed with the other party (up to 28 days) or through the court. We are aware that Orders have been made extending the time for certain steps to be taken by 56 days.

Commercial leases generally prevent a tenant from withholding payments of rent. If a tenant stops paying rent there will be a breach of the tenant’s covenant to pay rent which, strictly speaking, will entitle the landlord to forfeit the lease and/or seek to recover the arrears in the courts. 

However, on 23 March 2020, the Ministry of Housing, Communities and Local Government announced that all commercial tenants in England, Wales and Northern Ireland missing rent payments are to benefit from a government ban on forfeiture of their lease. This change, which will prevent landlords from terminating leases and evicting commercial tenants, is included in the Coronavirus Bill. It will come into force very shortly (once the Coronavirus Bill receives Royal Assent, which is expected to be in a matter of days) and will last until 30 June 2020, with an option for the government to extend this deadline.

It is anticipated that many commercial tenants will take advantage of the reprieve and withhold their rent. Importantly note the rules will apply not only to principal rent but to “any sum a tenant is required to pay”, leaving the burden of supplying services and insuring the premises on landlords.

It is also important to note however that the protection offered by the government is from the threat of forfeiture should tenants withhold rental payments. The liability to pay the rent however remains an interest on unpaid rents will accrue. Furthermore, remedies other than forfeiture may be pursued by the landlord e.g. service of a statutory demand before insolvency or ordinary litigation proceedings for arrears etc.. Tenants then ideally should look to reschedule or suspend rental payment through discussions with their landlord.       

The advantage of this being you might be able to negotiate a sensible and manageable repayment program in respect of the suspended rent, free of the threat of litigation.