COVID-19
Self-employed and experiencing financial disruption, what help is available?
Self-Employed Income Support Scheme
If you are a self-employed individual or a member of a partnership then you may be eligible for a grant under the Self-Employed Income Support Scheme. The scheme will allow you to claim a taxable grant worth 80% of your trading profits up to a maximum of £2,500 per month for the next three months.
You cannot apply for this scheme yet and HMRC will contact you if you are eligible for the scheme and invite you to apply online. To be eligible you would have to:
• Submitted your Income Tax Self-Assessment Tax Return for the 2018/19 tax year.
• Traded in the 2019/20 tax year.
• Are trading when you apply, or would be except for COVID-19
• Have lost trading/partnership trading profits due to COVID-19
Your self-employed trading profits must also be less than £50,000 and more than half of your income comes from self-employment. This is assessed by at least one of the following conditions being true:
• Having trading profits / partnership trading profit in 2018/19 of less than £50,000 and these profits constitute more than half of your total taxable income.
• Having average trading profits in 2016/17, 2017/18 and 2018/19 of less than £50,000 and these profits constitute more than half of your average taxable income in the same period. If you started trading within this period HMRC will only use those years for which you filed a tax return.
The 80% grant will be calculated by HMRC on average profits figures submitted from 2016/17, 2017/18 and 2018/19 by adding together the three tax years, then divide by three, then by twelve to calculate a monthly amount. If you only started trading in 2017/18 or 2018/19 monthly amounts will be averaged accordingly. The amount calculated will also take into account any tax credits you claim.
Once you have given HMRC your figures they will calculate the grant due and pay the amount as a lump sum into your bank account. They aim to get monies out to qualifying people by early June.
As agents we should be able to submit the claims on your behalf if you are eligible and we will look to keep you updated if we can. In the mean time if you would like us to check if you are eligible and how much you might receive please feel free to contact us.
Mortgage Holidays
Mortgage lenders have agreed they will support customers that are experiencing issues with their finances as a result of COVID-19. The type of support mentioned is a payment holiday of up to 3 months.
It would be worthwhile contacting your lender to discuss your situation and seeing what else they can offer as many banks and building societies announced the following assistance:
• Access to locked in savings penalty free
• Extension to credit card limits
• Extension to terms of mortgages/switch rates
It has been mentioned that access to assistance offered by banks and lenders during this time should not impact on your credit score but you should check with your lender that this is the case.
Access to Universal Credits
The minimum income floor for access to universal credit has been suspended for self-employed people
affected by the economic impact of coronavirus. You can apply online via the gov.uk website or contact the helpline on 0800 328 5644 to see you are entitled to.
HMRC Dedicated Helpline – Time to Pay Service
HMRC have set up a helpline to support anyone who is concerned about paying taxes due to the impact of
coronavirus.
The helpline number is 0800 024 1222; hopefully you will not require this but if your cash flow is impacted it
would be worthwhile contacting HMRC to make them aware.
Deferring Income Tax
All tax payers within self-assessment can defer their 31 July 2020 payment on account until 31st January
2021.
This is an automatic offer with no applications required and the government has stated that no penalties or
interest will be charged in this deferral period. HMRC have highlighted that if you can afford to make
payment then you should do so.
Deferring VAT Payments
The deferral for VAT payments will apply from 20th March 2020 until 30th June 2020 and applies to all UK
businesses.
This is an automatic offer with no applications required therefore businesses will just not be required to make
a VAT payment during this period. Businesses will have until the end of the 2020/21 tax year to pay liabilities
that have accumulated during this deferral period.
Please note that you still have to submit the VAT return as the deferral is only for the payment. Also, if you
pay you VAT liability by direct debit you will need to cancel this with your bank so that the payment is not
collected.
This measure has no impact if your business is due a VAT refund and these will be reclaimed as normal.
Interruption Business Loan Scheme
Coronavirus Business Interruption Loan Scheme available to support small and medium sized businesses
via loans and overdrafts, invoice finance and asset finance. Ian Walker in our Corporate Finance team will be
happy to discuss any questions you may have in accessing the scheme.
Grants and Business Rates Holidays
If you operate from premises you may be eligible for grants or business rate holiday as follows:
• £10,000 one off grant for all businesses in receipt of small business rate relief or rural rate relief
• £25,000 one of grant for retail, hospitality and leisure businesses with property with a rateable value
of between £15,001 and £51,000.
• Business Rates Holiday for Retail, Hospitality and Leisure Sectors
Protection from Commercial Eviction
If your business does rent premises and you cannot pay the rent due to COVID-19 you will be protected from
eviction. This will cover payments up to 30th June 2020 and there is an option for the government to extend
this period if needed.
This is not a rent holiday and you will still be liable to pay the rent.
Fraud
Watch out for scams as some criminals are trying to take advantage of the outbreak. This includes offering
medical products, guidance or tax refunds.
If someone texts, calls or emails claiming to be from HMRC, saying you can claim financial help or are owed
a tax refund, and ask you to click on a link or to give information such as your name, credit card or bank
details, it is a scam.
Contact Us
We will be keeping an eye on updates and looking out for guidance as it is issued but please feel free to
contact us if you have any questions or require assistance in any way.
Please keep an eye on our website for updates as well as signing up to our Resources section.