Support_ for_ Self-Employed_ Workers
- Share_
On Thursday 26th March 2020 the Chancellor announced a new Self-Employed Income Support Scheme, for those self-employed workers who have been adversely affected by the Coronavirus. Please note that this does not appear to apply to individuals who are Directors of their own Service companies. If you pay yourself a salary and dividends through your own company, you are not covered by the scheme but will be covered for your salary by the Coronavirus Job Retention Scheme if you are operating through PAYE.
This support will take the form of a taxable Government Grant, worth 80% of average monthly profits over the last 3 years and up to maximum of £2,500 per month. This ensures the same amount of income will be covered for Self-Employed individuals, as is currently being provided for furloughed employees.
The scheme will be available across the UK for a period of at least 3 months, longer if necessary.
It will be possible to claim these grants and still do business.
To ensure this scheme can benefit those most in need, it will only be available to self-employed workers who:
- have a trading profit of less than £50,000 in 2018-19 or an average trading profit of less than £50,000 from 2016-17, 2017-18 and 2018-19.
- derive the majority of their income from self-employment
- are already in self-employment and have filed a Tax Return for 2019
A concession is also being given by the Government to any legitimately self-employed individual who missed the 31st January 2020 filing deadline; they now have 4 weeks from 26th March 2020 to submit their Return.
Access to the scheme should be available by June 2020 and those individuals eligible to apply will be contacted by HMRC directly. They will be asked to complete and submit an application form online and HMRC will then pay the grant directly into the claimant’s bank account.
Any self-employed worker in need of financial support between now and the commencement of this scheme, can make use of the previously announced Business Interruption Loans and the option to defer their July 2020 payment on account. Self-employed individuals will now also have access to full Universal Credit.
Updated Income Tax Deferment Facility
In the last 24 hours HMRC have also confirmed that the option to defer the July 2020 payment on account until 31st January 2021 will apply to all taxpayers, not just the self-employed.
No application is required and no late-payment interest or penalties will be charged on payments deferred to 31st January 2021, but those who are able to make their July payment on account are being advised to do so.
Clarification of VAT Deferral Period
Under the Government’s VAT Deferral scheme, businesses can defer VAT liabilities falling due in the period between 20th March 2020 and 30th June 2020. The VAT quarters that benefit from this scheme are therefore as follows:
QE Feb – normally due 7th of April 2020
QE Mar – normally due 7th of May 2020
QE April -normally due 7th of June 2020
Please could all clients that we prepare and submit VAT returns for please provide us with the required information as and when due, penalties will be applied by HMRC for the late submission of the VAT return.
Any further updates will be communicated to you as and when they occur.
- Share_
