Support for Self-Employed COVID-19
On Thursday evening, Chancellor Rishi Sunak unveiled the eagerly awaited government aid plans for the self-employed in the UK. The scheme looks to mirror the current support offered to the employed by offering an 80% guarantee on income up to £2,500 per month (dependant on conditions).
How much will I get?
Much like the scheme introduced for people on PAYE system, the government are looking to provide a similar grant to the self-employed to cover 80% of their total average income also guaranteed of up to a maximum of £2,500 per month.
This will be calculated by taking 80% of your average trading profits from the last 3 tax years (where applicable) to determine an appropriate monthly figure.
There is no need to apply for this grant – if you are eligible, HMRC will contact you directly and invite you to apply online. If successful, this money will be paid directly into your bank account.
Please note that the whilst this has been announced the systems are not quite in place so it may take HMRC some time to contact you.
Criteria for the proposed government grant is as follows where you:
- Must be a self-employed person or member of a partnership
- Must have submitted tax return for the 2018-19 tax year
- Must have traded in the tax year ending 2019-20
- Intend to continue trading in the 2020-21 tax year
- Have lost profits due to CVOID-19
- Must have at least one set of accounts/year of trading to claim
Unfortunately, under the current rules, this means that for those of you commencing trade as self-employed and or a member of a partnership in the 2019-20 tax year – you will not qualify for this grant.
Whilst you are required to meet the eligibility criteria as stated above, your self-employed trading profits for the year must also be no more than £50,000 where more than half of your taxable income must be from self-employment.
One of the following conditions must be true in order for this to apply
- Have trading/partnership profits of less than £50k in 2018-19 which constitute more than half your total taxable income
- Having average trading profits in 16-17, 17-18 and 18-19 of less than £50k and these profits contribute towards more than half your average taxable income in the same period
Late filing your tax return?
The chancellor has also extended the submission period for people who are still yet to file their tax return for the 2018-19 tax year.
These people now have until the 23rd April 2020 to file their return with HMRC if they wish to benefit from this grant.
Other financial aid measures available to the self-employed:
- 12-month business rates holiday for all retail, hospitality, leisure and nursery businesses in England.
- Small business grant funding of £10,000 for all business in receipt of small business rate relief or rural rate relief
- Grant funding of £25,000 for retail, hospitality and leisure businesses with property with a rateable value between £15,000 and £51,000.
- Coronavirus Business Interruption Loan Scheme offering loans of up to £5 million for SMEs through the British Business Bank (Requires business bank account)
- Deferral of VAT from 20 March 2020 until 30 June 2020.
- Income Tax, July Payment on account deferred until 31 January 2021.
- Protection from eviction for commercial tenants who cannot pay their rent due to Covid-19. For missed payments up until 30 June 2020.
- Universal Credit application
For more information please contact our office and we would be more than happy to help Call us – 01273 441 187.