Archive: MoneySavingExpert's Money Tips Email

Martin's coronavirus update

16 NEW need-to-knows, incl all overdrafts 0%, work-from-home tax back, furlough hope for some & help for others, BT Sport, school meal vouchers, travel ban, gym refunds & more

Over the last fortnight, via MSE, social media or my TV show, I've had 50,000+ questions. Clearly I've not read them all. Yet a theme is coalescing. The first wave of financial confusion and worry has passed, and many understand the help they'll get.

What's now surfacing are the holes in the support system. Gaps where people aren't being helped. I've cried more than once, reading such desperation, frustrated that while my role has always been to have answers, in some cases I can't give an answer, as there isn't one.

So some of my focus today is on those gaps, trying to close them where we can, and expose them where we can't. Admittedly a few are missing, as they're still on the to-do list. The team and I are working flat out - EVERYTHING we learn goes into one of our four full coronavirus guides, which are updated several times each working day:

While we strive for 100% accuracy, the situation continues to be fast-moving, so we can't promise perfection - please give us some wiggle room.

1) Working from home? Claim tax back on additional home expenses. If your employer requires you to work from home, and that means you've had increased costs, eg, heating & electricity, you're entitled to claim something back for them. Clearly, right now millions are required to work from home, but in practice, apportioning the cost is tough, so instead you can opt for what's effectively a £6/wk flat rate.

With talk of working from home lasting up to 6mths, this is worth knowing. Full help in my NEW claim tax back for working from home blog, but in brief, either...

- You can ask your employer to pay you the £6/wk extra, free of tax. Yet right now, with many firms struggling, asking may be bad timing, so...

- If not, you can claim tax relief on £6 of income, which for basic 20% taxpayers is £1.20/wk (about £60/yr), and 40% taxpayers £2.40/wk (about £120/yr).

(Apologies if you're getting deja vu. This tip was included in some early sends of last week's email - then I pulled it after receiving conflicting info over a point. Now it's all double-checked - even HMRC has read it.)

2) From Thu. The first £500 of all authorised overdrafts can be interest-free. Back in Feb, though it feels like ancient history, I explained that from Mon 6 Apr, regulation changes to make banks ditch daily overdraft fees and just charge interest meant almost all would charge 40% AER - nearly double a high street credit card, making overdrafts the new danger debt.

We didn't know then quite how terrible that timing would be. Now the regulator, the FCA, has proposed emergency measures, via a lightning-quick consultation. That's due to be ratified tomorrow, Thu, (I'd be gobsmacked if it wasn't), then over the next week or so banks should put in place...

- That for those struggling due to coronavirus who ask, the first £500 of authorised overdrafts can be interest-free for 3mths (for overdrafts under £500, the entire balance will be interest-free).
- Those with accounts that have an overdraft facility, who are struggling due to coronavirus, should be able to request one of these 0% overdrafts, subject to a credit score.
- For the next 3mths, no one should be charged more under the new about 40% interest rates than they were under the old system. 

To be fair, many banks were offering some easing anyway, but this deletes the 'lottery' element. After all, no one chose a bank based on how well they'd behave in this never-imagined crisis. See bank-by-bank overdraft help & updates for info on what yours is doing.

3) From Thu. All credit cards, store cards, personal loans and catalogues must offer payment holidays. The same FCA consultation as for overdrafts (above) also proposes that all lenders will be expected to move towards offering payment holidays of up to 3mths on personal loans, credit cards and catalogue debts - so if you can't pay, you won't need to.

Don't just stop payment though - you need to agree it with them. Once done, these payments aren't allowed to hurt your creditworthiness, nor can there be any penalties or charges if you do it (in our consultation response, we suggested you can't lose a 0% deal either - we wait to hear back). See full lender-by-lender credit and store card help & updates.

- Is it worth taking a payment holiday? Yes if you have an emergency cash flow need, no if not. That's especially true if the interest rate is high, as it'll still rack up during the payment holiday, and as you're not making repayments it can be hefty. So only do this if you need it.

- Does this apply to car finance, payday loans & other short-term credit too? No, although I hear at least with car finance, the regulator is likely to make an announcement soon, though lenders are already required to show forbearance to customers. See car finance help.

4) Employer unsure about furloughing you? New cheat sheet, including template letter to make it easy for employers. The Coronavirus Job Retention Scheme makes employers the gatekeepers to crucial state support. For those without work or who can't work, it lets them put their employment on hold and the state pays 80% of salary, up to £2,500/mth max.

Sadly though, many employers are instead putting staff on slashed hours, unpaid leave or making them redundant. There are many reasons for this, but I suspect one - especially for small firms - is simply due to confusion or difficulty. To help, I've drafted a cheat sheet:

The idea is to use it as a jump-off point for a discussion with an employer - give them a sheet too (more detailed info in our full Coronavirus Job Retention Scheme guide). We hope the info helps.

Plus as furloughing sometimes involves both parties agreeing a contractual change, employment specialist ACAS kindly sped up drafting its furloughing template letter for employers so we could include it. It's an easy legal way to furlough someone.

5) The Govt's CHANGED its guidance - firms can now rehire and furlough staff who left after 28 Feb to go to work elsewhere. As explained above, the Coronavirus Job Retention Scheme lets firms put staff on furlough. The official guidance has always said employers can rehire and furlough staff they'd made redundant after 28 Feb.

Last week, I managed to get confirmation that nowt prevented the same happening for staff who'd left voluntarily, and whose future plans were then derailed due to coronavirus. Yet without seeing this in black and white from officials, many employers still said it couldn't be done.

So thankfully I managed to persuade the Govt to put it in black and white. It updated the guidance last weekend. Full info and links to the official Govt guidance in rehiring and furloughing help. Best of all, it's already helped some - here's one (lovely, lovely) employer on Twitter who says he's rehired a few people to furlough after seeing our info.

But while this may help 1,000s, it still leaves possibly 100,000s who started jobs after 28 Feb in real dire straits. I asked the Chancellor Rishi Sunak if he'd consider making the crucial 28 Feb date later, or look at other solutions - you can watch the Chancellor's new starter furlough response, but in a nutshell, sadly there are no planned changes. This is one hole that desperately needs plugging.

6) Employers CAN furlough those who can't work due to looking after children or as shielding themselves in line with health guidance. There's much confusion over this. Employers have discretion to choose to furlough someone via the Coronavirus Job Retention Scheme, but some are wrongly turning down requests thinking they're not allowed.

Nothing in the guidance prevents furloughing in these cases, yet as employers are nervous, to help on Thu I tweeted the Chancellor for clarification, and got back an official statement.

My written question: "Can you please publicly clarify that furloughing the vulnerable who must self-isolate for 12wks, or those who can't work as they need to look after children, doesn't breach the furlough rules?" The Chancellor's response from his Treasury team: "Employees on sick leave or self-isolating should get statutory sick pay, but can be furloughed after this. Employees who are shielding in line with public health guidance can be placed on furlough. "Childcare: Yes, if because of coronavirus closing schools you are unable to work and at risk of redundancy, your employer can furlough you."

7) Newly self-employed? Sadly the Chancellor said no to including you this tax year. Under the Self-employment Income Support Scheme, the state will pay 80% of average profits up to £2,500/mth (provided total annual profits are under £50,000).

The average profit is based on earnings in the three tax years up to 5 Apr 2019. This leaves those who started a business after that in the lurch. Even some who started the year before may fall foul, as to qualify, over 50% of annual income needs to be from self-employment.

Many have contacted us, asking what they can do. To help, I asked the Chancellor Rishi Sunak if he'd change the guidance to include profits of those who submit speedy tax returns for the most recent tax year, the one that ended on Sun. In his video answer, sadly he said no. Another gaping hole that needs fixing.

8) Limited company directors' tips, to come. I've had a few ideas to help one (wo)man bands who work as limited companies - perhaps the biggest hole in support of all - yet I'm waiting for official confirmation they're doable. I'm afraid this is only about tweaks, not big changes, so don't hold out too much hope. Hopefully it'll be in next week's email, or if I get it earlier, we'll add it to the limited company help, and I'll tweet it. Just didn't want you to think we'd forgotten you.

9) Nine things the Chancellor could tweak to help people through this (and HIS ANSWERS to five of them). The Chancellor has rewritten decades' worth of state-support policies in days - and the new employed and self-employed help schemes will provide crucial, much-needed support for millions.

But as I keep saying, there are holes, so I collated nine things the Chancellor could tweak, including furlough, the vulnerable, childcare, self-employment, umbrella workers, limited companies and more. And as he was doing an #AskRishi on Twitter last week, I managed to get his answers on some of them (a few of which I've included here).

10) Three tips if you're struggling with universal credit ID checks. The UC system is swamped, with 10x the normal applications (use our 10-min benefit check-up to see if you're likely eligible). Call centre staff are working flat out in unusual conditions (please be nice to them), so no surprise, I've had reports of people struggling, especially at the stage where you need to give ID. So here are three tips to help...

- Make a note in your online UC journal of the problem, it should help ensure someone gets in touch.
- UC staff will try to call you as the form is incomplete without ID. Expect a 'withheld number' or 0800 number (but beware of scams).
- You can try calling the UC helpline, but it will be busy.

To show you it's worth persevering, Jen told me on Facebook: "I honestly dreaded this process as we'd never been through it before. Tried the phone - too long a wait. Tried online - thought we hadn't successfully completed the process. Then they rang us. All done and sorted in a week. Thank you universal credit workers."

11) The Foreign Office now advises against travel 'indefinitely'. It had already advised against non-essential travel until Thu 16 Apr - now it's extended this, with no clear end date. In some ways this makes things trickier, as before this advice it was clear there was an end date. 

Yet as this is now effectively a 'no travel until we say so' and we don't know when they'll say so, it's likely you'll need to wait until close to your travel date before airlines/hotels/travel insurers agree to refunds. Though for trips before Thu 16 Apr, hopefully the prior guidance means they can do that now. Help is in the Coronavirus Travel Rights guide.

12) Qualify for free school meals? You're due a food parcel or £15/wk supermarket vouchers even during the Easter holidays. The Govt's now put measures in place across Eng to ensure some form of food while your child's at home. The school should be arranging, but if in doubt, check. In Scot/Wales/NI similar-ish schemes are being set up and you should also get free meals, vouchers or money. Full info and help for all UK nations in 'free school meal' vouchers.

13) All National Express and most Megabus routes are suspended. Details and more info in coach refunds.

14) Most gyms are auto-pausing memberships. Bannatyne's, David Lloyd, DW Fitness First, Virgin Active and more are automatically stopping taking payments while gyms are closed. Some are even giving partial refunds for unused days last month. See gym-by-gym refund policies.

15) Unlimited cinema pass? Odeon is automatically pausing 'unlimited' memberships, and Cineworld will be too from Fri 17 Apr. See cinema pass help.

16) BT Sport custs can now ask for TWO months' bill credit. Last week, we told you it was allowing custs to claim 1mths' credit - now it's upped this to two, as there's no sport. Those who've already claimed will get it automatically. Remember, Sky Sports custs can also pause subscriptions.

That's this week's update. I hope it helps. Stay safe, stay healthy, stay at home if you can, and grab any opportunity to smile. Have as happy an Easter as you can, and chag sameach to those, like me, doing Passover seder's (which means no live ITV show from me this week, that's back a week tomorrow, Thu).