COVID-19

Below, we have summarised the main areas of the governments plans to help the self employed and business owners in the catastrophic wake of the coronavirus.

if you would like any more information on any area please get in touch.

Things are developing day by day so we will update our site as and when information is available.

UPDATED 26/03/2020

On 26 March, the chancellor announced the Self Employed Income Support Scheme which looks to help many people at this time, however there are people who this will not apply for.

The good news

The basics are that provided you have submitted a self assessment tax return for 2018/19 including self assessment, continued to trade into 2019/20 and are still trading or would be if not for coronavirus, you will be eligible for a TAXABLE grant of 80% of the average of your taxable self employed income included on your last three tax returns (up to a maximum of £2500 per month).

It will initially be paid for three months (but may be extended if necessary).

You can claim even if you continue to work.

If you have not been trading the full 3 years the average will be worked out based upon the available years.

You do not need to apply for this, HMRC will contact you about claiming, then you will be required to complete an online form and the grant will be paid directly to you.

The bad news

As it is taxable, you will be required to include it on your 2020/21 tax return and pay any tax and NI due on it, so it may be worth putting some to one side.

You are not likely to receive this until June.

If you started self employment after 6 April 2019 you will not be eligible for this scheme.

If your average earnings are over £50k, you will not be eligible for this scheme.

If your self employed income is less than 50% of your total taxable income you will not be eligible for this scheme.

If you trade as a Limited company you are not eligible for this scheme.

For the full government advice on this please see here

If you are not eligible for this scheme you may still be able to claim for Universal Credit,

There are a few plans set out to help you financially at this time.  these are set out to help cover costs to you if employees are absent (due to Covid-19 or having to self isolate) or you dont have the work to support staff and have to temporarily lay them off.

If an employee is off ill due to Covid-19 they are now entitled to claim SSP from the first day of absence instead of the previous 3 waiting days.  In addition, the SSP you pay as an employer is now reclaimable from the government in full for the first two weeks.  The mechanics of this is not yet known but we will update as soon as we know.

One of the biggest parts of the support plan is in relation to the coronavirus job retention scheme.   if your business has to temporarily close or temporarily lay off staff, HMRC will fund 80% of your employees wages (up to £2500 per month) to ensure their jobs are safe.  This will be a massive help to employers who were unsure how they were going to fund wages over the coming weeks.  This will be applied for through a government portal but, as yet, there are no firm details when this would be available although it is planned to be mid / late April.

Here is a summary of the scheme:

• employees must have been working for you on 28 February.
• you must officially designate the employees as furloughed and advise them of this, there is a minimum 3 week period for furloughed staff.
• covers all employees (full time, part time, agency, flexible/zero hours)
• does not cover self employed workers
• employers can pay them the 80% (or £2500) or top it up to 100% but will only be able to claim the 80%
• for employees whose pay varies, you can claim the higher of the pay from the corresponding month in the previous year or the average of the year to date.
• all payments must be made through the PAYE system and will be subject to tax and NI as usual.
• you can also claim for associated NI and pension (provided this is still within the £2500 limit)

For full details please see here

The problem a lot of businesses are currently facing is having the available cashflow to pay the wages in the period before the grants are available.  There is currently no set plan from the government in relation to this.  you may be able to apply for a business interruption loan from your bank or other finance (overdraft/loans/invoice financing).  If you require any assistance on this please get in touch.

There are two grants currently available.  if you pay little or no business rates because you claim small business rates relief you will be entitled to a one off £10k grant from the government.  you do not have to apply for this, your local council will contact you in April to arrange this.

if you are in the retail, hospitality and leisure industries you will be entitled to £10000 if your rateable value is less than £15,000 and £25000 if your rateable value is between £15001 and £51000.

HMRC have put a number of plans in place for this, these include:

• deferral of your next VAT return payment  (due between 23 March and 30 June 2020).  This does not need to be paid by the usual due date, instead you will have until 31 March 2021 to make the payment.  if you pay be direct debit you should ensure you cancel it to prevent the payment being taken automatically.
• Self assessment payments on account due 31 July 2020 will not be due for payment, instead any balance of tax due will be paid in January 2021.
• scaling up of time to pay to all firms who are in temporary financial stress dut to the outbreak.

You can also apply for a government backed business interruption loan which will be interest free for 12 months.

for more information please feel free to contact us or review the government support page here