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Chartered Certified Accountants
and Business Advisors

01530 447999

Covid-19 Further updates & measures introduced to help if you are a Self-employed individual and/or Partners of Partnerships

Quick content links

Taxable grants

Self-Assessment Information

VAT Payments

Time to Pay

Universal Credit

Business loan interruption scheme

Staff retention scheme

Sick pay reimbursements

Increases to employment allowance

Business rates

Cash grants

Introduction

The government has been unprecedented in bringing out measures to help people during the Covid-19 outbreak and they want to ensure they can help as many of those as possible, so we don’t all suffer too much financial hardship.

It is inevitable that we will all suffer in some regards and each one of us must play our part in supporting our nation and economy to get back to where it was before this pandemic began. 

We hope you have been finding our information to date useful and we will keep this coming through to ensure every one of our clients, contacts and associates are kept informed.  This is part of our excellent service we deliver here at Sence.

We want to support you all at these difficult times and we have worked tirelessly this past 2 weeks to stay on top of the government releases and speak with many of you.  Please do continue with the communications through our various channels, we are here to help you, and we appreciate the information isn’t easy to digest and interpret.

It is important you seek professional support & advice on matters relevant to you and your business and remember your business and/or circumstance may not be the same as someone else’s therefore the regulations are NOT a one size fits all. 

We have also been hearing various interpretations of the new measures put in place; which again for us makes us want to stress the importance of seeking professional support and advice when needed.  Most of the time things are not straight forward!

This article is designed specifically for those who are Self-employed Individual and/or Partners of Partnerships and it will provide you with more guidance and knowledge on the latest releases.

Taxable grants - automatic offer

Taxable grant of up to 80% of your trading profits available – No application necessary invite only

  • This is a grant and so will not need to be repaid. 
  • HMRC will invite you into, you do NOT need to do anything immediately; they will assess your records and write to you in due course.  
  • You must have submitted your 2018/2019 self-assessment tax return.
  • If you haven’t done this you have until the 23rd April 2020 to do this, DO NOT DELAY GET IN TOUCH.
  • You must have traded throughout 2019/2020.
  • You must have intended to trade into 2020/2021.
  • You must have suffered as a result of Covid-19.
  • Profits must be less than £50,000 each year and these must constitute more than half of your taxable income.
  • Capped at £2,500 per month for 3 months.
  • HMRC will review your trading profits for the 2016/2017, 2017/2018 & 2018/2019 tax years and assess you based on an average over the 3 years.
  • This is NOT something you need to apply for, to ring them up about and/or email, write to.  They will review your records and write to you in due course.  It is expected that this will June time.
  • Should you claim Child Tax Credits any grant awarded will need to be included when reporting income along with other income and earnings.

Self-Assessment Information - automatic offer

Self-Assessment 2nd Payment on Accounts has been deferred – automatic offer with no application necessary.

  • People who are due to make payments on account towards their self-assessment tax bill in July this year can defer this until 31st January 2021.
  • This deferral is option and HMRC encourage that if you still can pay this to do so.
  • No interest or late payment penalties will be charged on these payments provided they are made by 31st January 2021.
  • This is applicable to all individuals in this situation NOT just the self-employed.

VAT Payments - automatic offer

VAT payments have been deferred – automatic offer with no application necessary

  • Any Vat becoming due between 20th March and 20th June 2020 will be deferred until 31st March 2021. 
  • You still need to submit your Vat returns in the normal way and following the normal filing deadlines. 
  • If you pay your Vat by Direct Debit and you are struggling to pay, then you will need to cancel this to stop it being taken.
  • All refunds and reclaims will be paid out by HMRC in the normal way.

Time to Pay - contact HMRC

Time to Pay enquiries – you are required to contact HMRC directly on 0800 0159 559

  • They have vamped up their support to help individuals and businesses who, as a result of Covid-19, are struggling to pay tax bills.

Universal Credit - application needed

Increased amounts of Universal Credit are available – application will need to be made

  • Universal credit is available for those on low incomes but there are criteria attached as to whether you can claim.  See Universal Credit for more information.
  • Universal credit is designed to adjust as income increases or drops so if you are sick and/or can’t work this is your route to seek further help.
  • Employment Support Allowance is also available for self-employed with little or no income.
  • Pension credits are available to those of pensionable age on low incomes.

Business loan interruption scheme - application needed

Business loan interruption scheme – application to a lender will be required

  • This is a new loan scheme available where the government will back up to 80% of the borrowings.
  • Those that take out a loan of this type won’t need to pay interest for the first 12 months, therefore having the benefit of lower monthly payments. 
  • Click on the link Business Interruption Loan Scheme for further details. 
  • We are finding that some lenders are setting out many hoops ready to get us to jump through on these applications!

Staff retention scheme - application needed

Staff Retention Scheme – application necessary in due course for the funding

  • This is a scheme designed for those employees you have that now face the threat of job loss/redundancy as a direct result of Covid-19. 
  • If there is no position for these staff and you are happy that you will have them back when the pandemic is over then they can be put onto furlough leave and you could potentially recover 80% of their basic wage/salary. 
  • This needs to be approached with care to ensure this is a valid and viable route for your workers and there are conditions attached to ensure you will be eligible for the recovery of the costs.
  • It is a variation to contracts of employment and so this needs a discussion with those potentially affected and it needs to be agreed in writing.
  • Please see the link for further information Staff Retention Scheme.
  • We do advise you seek a mixture of tax & HR support when discussing this as an option and BEFORE you do anything.
  • It is thought at the moment that the £2,500 cap is to cover basic wages/salary and that additional funds will be available for the Employer’s National Insurance and basic requirement of pension contributions.  More details will be confirmed by HMRC shortly.

Sick pay reimbursements - mechanism not yet known 

Sick Pay Reimbursed – Mechanism being developed for reclaiming 

  • Employees can claim statutory sick pay from Day 1 of being off work due to showing Covid-19 symptoms and/or self-isolation with a member of the household in which they live.
  • The rebate scheme for claiming this back is being developed and more information will follow once legislation is passed but the employer must pay the employee in the meantime.
  • Criteria is also attached to this relief. For information visit COVID-19 Sick Pay guidance.

Increases to employment allowance - application through payroll

The Employment Allowance is Increasing – application through payroll needed

  • If you do have employees and pay Employer’s National Insurance, then your employment allowance will see an increase from £3,000 to £4,000 during 2020/2021.
  • Dependent on software used to run payroll you may need to tick a box within to make this claim effective on your payroll.
  • Not relevant to you if your Employer’s NIC bill is more than £100,000.

Business rates - automatic offering

Business rates relief support – no application necessary

  • Those who are in the hospitality, leisure and retail businesses with business premises with a rateable value of between £15,000 and £51,000 may be eligible for a business rate relief on their rates for the next 12 months.
  • Your relevant Council authorities will write to you in due course and rebill you, many are already receiving this notification through.

Cash grants - automatic offering

Cash grants available – No application necessary

  • Those who are in the hospitality, leisure and retail businesses with business premises with a rateable value of between £15,000 and £51,000 may be eligible for a grant of £25,000 per property.
  • Those in the same industries with a rateable value of up to £15,000 will be eligible for up to £10,000.
  • Support for Nursery businesses that pay business rates are available and;
  • Support for those other businesses who qualify for SBRR & RR of £10,000
  • Your relevant Council authorities will write to you in due course if you qualify.  Initial contacts are expected towards the end of April.

Important Points to finish

Just to finish off, please be very careful of emails, text messages and/or phone calls you may receive from HM Revenue & Customs.  With all the Covid-19 stuff and their normal practices they don’t communicate through these channels very often and nor without prior written at least, so any communications you do get in this way are more than likely fraudulent.  They can be reported direct on www.gov.uk

The detail in this article is not everything available, there is a specific section to all things Covid-19 on HMRC’s website.  This is being update daily so please refer to this to stay on top of what comes next.

Please, all take care. 

Stay in & stay safe.

27 Mar 2020

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