Assistance for the Self-Employed
On 26th March, the Chancellor has announced a grant that is available to the self-employed (sole traders and partnership members). The grant will allow the self-employed 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, with scope to extend that period if appropriate.
You must meet the following:
- You must have submitted a 2018-19 tax return with self-employed earnings included. Note if you have not filed your 2018-19 tax return, you have until 23rd April 2020 to file it.
- You must be trading in the 2019-20 tax year and still be trading at the time of application (The exception to this being if COVID-19 is preventing you from trading)
- You must intend to continue trading in the tax year 2020-21
- You must have lost trading profits as a result of COVID-19
- Your trading profits must be less than £50,000 (either in 2018-19 or the average of 2016-17, 2017-18 and 2018-19 overall) and make up more than 50% of your total income
The grant will be calculated based on 80% of your average profits from the tax years 2016/17, 2017/18 and 2018/19, capped at £2,500 per month. This will be paid for the 3 months to May 2020 and will be paid in a single lump sum instalment covering all 3 months at the beginning of June.
If you are eligible, HMRC will contact you and invite you to apply online, individuals have been asked not to contact HMRC about the scheme.
Those who pay themselves a salary and dividends through their own company are not covered by the scheme but will be covered for their salary by the Coronavirus Job Retention Scheme if they are operating PAYE schemes – we will issue further guidance on this shortly.
We are expecting to there some further details about the scheme within the next week.
Please don’t forget that these options are also available to you:
- Coronavirus Business Interruption Loan Scheme (CBILS) – A loan available to small businesses whereby the government will cover the first 12 months interest payments with no upfront fees.
- Grant of £10k if you pay rates and claim Small Business Rates Relief or Rural Relief. Or a £25k grant if you are in certain trades (retail, hospitality, entertainment, for example) and occupy property with Rateable value below £51,000 but above Small Business Rates Relief amounts.
- Universal Credit – You will still be entitled to claim Universal Credit until the grant is received. You can do so by contacting the Universal Credit helpline on 0800 328 5644
- Deferring VAT payments that would usually be payable between 20th March 2020 and 30th June 2020 until the end of the 2020/21 tax year (this will happen automatically).
- Deferring your self-assessment payment on account due 31st July 2020 until 31 January 2021 (Automatic)
- Arranging a time to pay agreement with HMRC for any other unpaid taxes.
- You can request payment holidays from your mortgage provider, landlord, credit cards, finance companies, suppliers, etc.
Please contact us if you would like some further information regarding the above options.