Covid-19: Update 2020-03-27

Last night (Thursday, 26th March 2020) the government announced measures to support self-employed and partners of partnerships. This email aims to give you the details that we know so far.

As we hope you can appreciate the situation is changing rapidly, so the information within this email is what we know so far.

The full government guidance for the self-employed can be found here:

https://www.gov.uk/guidance/claim-a-grant-through-the-coronavirus-covid-19-self-employment-income-support-scheme.

The Self-Employment Support Scheme

The scheme the government are introducing will allow you to claim a taxable grant worth 80% of your average trading profits for the last three tax years up to a maximum £2,500.

You will be eligible for the grant if you were self-employed or a member of a partnership during the 2018/19 tax return and:

• You submitted your 2018/19 tax return,

• Traded during the tax year 2019/20,

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

• Intend to continue to trade in the tax year 2020/21,

• Have lost trading/partnership profits due to COVID-19,

• Your total average over the 3 years income does not exceed £50,000.

• Your main source of income is your self-employment/partnership profits, (meaning your total income is made up of at least 50% self-employed profits)

If you have less than three years of tax returns filed HMRC will only use the years in which you submitted your returns.

If you have not yet submitted your 2018/19 tax return HMRC will give you until the 23rd April 2020 to do so. (If so, please get in touch ASAP!)

How to get the Grant

HMRC will contact you if you are eligible for the scheme and will invite you to apply online. We can of course assist you with this if you have difficulties when the time comes.

They politely ask that during this time individuals do not contact them as doing so will delay the work been carried out to administer the scheme.

Once HMRC have received your claim and you are eligible grant, they will contact you to discuss how much you will get and the payment details.

If you are in receipt of tax credits, the grant must be included in your claim as income.

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What if you do not qualify for the grant? (If you’re not self-employed or you don’t meet the above criteria)

At the risk of restating some of what has already been discussed, as of now the is government also providing the following additional support:

• Deferral of your second payment on account that would usually fall on 31st July 2020 until 31st January 2021.

• Deferral of you VAT payments due between 20th March – 30th June 2020 until 31st March 2021 (not 5th April 2021 as stated to some previously).

• Grants for businesses that pay little or no business rates. https://www.gov.uk/government/publications/guidance-to-employers-and-businesses-about-covid-19/covid-19-support-for-businesses#support-for-businesses-that-pay-little-or-no-business-rates

• Increased amounts of Universal Credit https://www.gov.uk/universal-credit

• Business Interruption Loan Scheme (https://www.gov.uk/government/publications/guidance-to-employers-and-businesses-about-covid-19/covid-19-support-for-businesses#support-for-businesses-through-the-coronavirus-business-interruption-loan-scheme)

• If you have business insurance, it may be worth checking your policy for any references to “government-forced closures”.