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Covid 19 Self Employment

Self-employed & personal tax payers:

The assistance available around the self employed, self assessment tax payers and individual support generally is moving extremely quickly. So we encourage you to check back here frequently. If you see something out of date or can provide updates please e mail

mike.evans@efaccountants.co.uk

Contents

Who can apply

How much you’ll get

How to apply

After you’ve applied

Other help you can get

This 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 3 months. This may be extended if needed.

Who can apply

You can apply if you’re a self-employed individual or a member of a partnership and you:

have submitted your Income Tax Self Assessment tax return for the tax year 2018-19

traded in the tax year 2019-20

are trading when you apply, or would be except for COVID-19

intend to continue to trade in the tax year 2020-21

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 come from self-employment. This is determined by at least one of the following conditions being true:

having trading profits/partnership trading profits 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 between 2016-19, HMRC will only use those years for which you filed a Self-Assessment tax return.

If you have not submitted your Income Tax Self-Assessment tax return for the tax year 2018-19, you must do this by 23 April 2020.

HMRC will use data on 2018-19 returns already submitted to identify those eligible and will risk assess any late returns filed before the 23 April 2020 deadline in the usual way.

How much you’ll get

You’ll get a taxable grant which will be 80% of the average profits from the tax years (where applicable):

2016 to 2017

2017 to 2018

2018 to 2019

To work out the average HMRC will add together the total trading profit for the 3 tax years (where applicable) then divide by 3 (where applicable), and use this to calculate a monthly amount.

It will be up to a maximum of £2,500 per month for 3 months.

We’ll pay the grant directly into your bank account, in one instalment.

How to apply

You cannot apply for this scheme yet.

HMRC will contact you if you are eligible for the scheme and invite you to apply online.

Individuals do not need to contact HMRC now and doing so will only delay the urgent work being undertaken to introduce the scheme.

You will access this scheme only through GOV.UK. If someone texts, calls or emails claiming to be from HMRC, saying that you can claim financial help or are owed a tax refund, and asks you to click on a link or to give information such as your name, credit card or bank details, it is a scam.

After you’ve applied

Once HMRC has received your claim and you are eligible for the grant, we will contact you to tell you how much you will get and the payment details.

If you claim tax credits you’ll need to include the grant in your claim as income.

Other help you can get

The government is also providing the following additional help for the self-employed:

deferral of Self Assessment income tax payments due in July 2020 and VAT payments due from 20 March 2020 until 30 June 2020

grants for businesses that pay little or no business rates

increased amounts of Universal Credit

Business Interruption Loan Scheme

If you’re a director of your own company and paid through PAYE you may be able to get support using the Job Retention Scheme.

Published 26 March 2020

The chancellor has announced that self-employed people will be able to claim grants worth 80% of their average monthly profits - up to £2,500 a month.

Rishi Sunak said the support for those affected by coronavirus would be in place for at least three months and amounted to "one of the most generous packages in the world".

The chancellor said it would deliver parity with his previously announced support for employed workers, and was "an unprecedented level of support" for cleaners, plumbers, electricians, musicians, hairdressers and others.

More to follow

Chancellor announces additional measures to help businesses and the self-employed impacted by COVID-19

The Chancellor announced a major package of support for the self-employed:

HMG will pay the self-employed a taxable grant worth 80% of their average monthly profits over the last three years up to £2500 per month

This will be available for three months. Will be extended if necessary

People can claim these grants and continue to do business

Covers self-employed same as those furlong

To ensure the funds reaches the people most in need:

Open to anyone of trading profits of up to £50,000

Available to people who i) make the majority of their income being self-employed, ii) Have a self-employed tax return for 2019

How to access

HMRC will contact you directly and you’ll have to fill out a form

HMRC will pay the grant directly to bank accounts.

Aim is to pay at the beginning of June (3 months backdated). Hoping to be quicker than that but recognition HMRC are now having to design two new systems

Anyone who missed the Jan filing deadline has an extra 4 weeks from today to submit their tax return

Further Details can be found at - https://www.gov.uk/government/news/chancellor-gives-support-to-millions-of-self-employed-individuals

 

As of today we know that:

For self-assessment payments due on the 31 July 2020, these will be deferred until the 31 January 2021.

Initially HMRC stated that if you are self-employed you are eligible, but it now appears this is available to anyone with payments on account.

This is an automatic offer with no applications required.

No penalties or interest for late payment will be charged in the deferral period.

The deferment is optional, but HMRC urge you to pay your second payment on account due, 31 July 2020,  if you are in a position to do so.

This is all in addition to the time to pay offer currently operated by HMRC.

 

Working Tax Credits:

As part of a number of measures to support the country during the coronavirus (COVID-19) pandemic, Working Tax Credits payments will be increased by £20 per week from 6 April 2020 until 5 April 2021.

The amount a claimant or household will benefit from will depend on their circumstances, including their level of household income. But the increase could mean up to an extra £3,040 in the 2020 to 2021 tax year.

If you claim Working Tax Credits, you don’t have to take any action or contact HMRC - the increase in your payments will start from 6 April 2020.

 

Statutory Sick Pay & Universal Credit:

SSP will be payable from day 1 instead of day 4 for affected individuals.

People who are advised to self-isolate for COVID-19 will can obtain an isolation note to cover this. Do not go to your GP.

Visit: https://111.nhs.uk/isolation-note/

Those who are not eligible for SSP, e.g. self-employed earning below the £118/week, can now make a claim for Universal Credit or Contributory Employment and Support Allowance.

The self-employed cannot claim SSP however you may be eligible for Universal Credits and/or Employments and Support Allowance. See:

https://www.gov.uk/employment-support-allowance

https://www.gov.uk/universal-credit

These may also apply if you are prevented from working because of a risk to public health.

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