Find support for your business and self using the Government's support finder here.
Anyone who is self-employed whose work has been adversely affected by the coronavirus is entitled to 80% of their income (based on their average profits over the last 3 years) up to a maximum of £2,500 per month (the same as for those who are employed).
If you started trading within this period, HMRC will only use those years for which you filed a Self-Assessment Tax Return.
See more on the Self-Employed Income Support Scheme (SEISS) here.
To qualify for the support you must be a self-employed individual or member of a partnership and you:
- Have submitted your Self-Assessment tax return for the 2018/19 tax year (although time has been extended to 23 April 2020 for the submission of this);
- Traded in the 2019/20 tax year
- Are trading when you apply, or would be were it not for the impact of Covid-19
- Intend to trade in the 2020/21 tax year
- Have lost trading/partnership profits owing to Covid-19.
In addition to this, your trading profits (after deduction of expenses but before tax) must less than £50,000 and constitute more than 50% of your total taxable income.
The amount you will receive will be 80% of the average profits from the tax years (where applicable) up to a maximum of £2,500 per month:
- 2016-2017
- 2017-2018
- 2018-2019
It will be calculated on the basis of total trading profits over the 3 years (where applicable), which are then divided by 3 (where applicable) and then by 12 to find the monthly average.
The Scheme is likely to be live from early June 2020 when payment will be made in the form of a non-refundable grant.
HMRC will contact you if you are eligible for the scheme after which you will be invited to apply online.
As stated above, if you have not yet completed a tax return for the 2018-19 tax year, time has been extended but it must be done by 23 April 2020.
The link to the Government Guidance is here.
If you are a company director who draws some of your earnings from dividends and some via PAYE, you can in principle furlough yourself and claim the 80% on the PAYE element of your income.
If you don’t qualify for either scheme further avenues of support are still available:
- First there is Universal Credit which has been increased by £1000 per year bringing it broadly in line with Statutory Sick Pay. Changes have been made to the minimum income floor making it much more accessible and there is no obligation to attend a job centre;
- Second, if you run a business in the retail, hospitality or leisure sector and do not pay business rates (under the current scheme) you may be entitled to a Government grant;
- Third, if you run a business you can apply for a Coronavirus Business Interruption Loan which is interest-free for 12 months;
- Fourth, for the self-employed HMRC have permitted deferral of self-assessment income tax payments due in July 2020 and on VAT payments due from March 2020 until June 2020;
- Fifth, if you have further difficulties meeting income tax payments help is available via HMRC’s Help to Pay Scheme.
There are a number of protections in relation to the home:
- If you are a renter, landlords must give you a minimum of three months’ notice before eviction so that you cannot be evicted during this period;
- If you are a homeowner you are entitled to a take a mortgage holiday of up to three months;
- The Government has announced increases to Housing Benefit
The link to the relevant Government guidance is here.
If you are self-employed, you may be eligible for the new Self Employment Income Support Scheme (SEISS). This will support the self-employed whose income has fallen temporarily due to COVID-19.
The Scheme will provide taxable grants to the self-employed, including members of trading partnerships, worth 80% of their trading or partnership profits up to a maximum cap of £2,500 per month. The Scheme will cover three months of your typical profits, so you could receive up to £7,500. HMRC will use your average annual profits from your tax returns for the last three years to determine the size of the grant for each person.
Further guidance is available on GOV.UK here.
If you are self-employed or own a business and you are concerned about not being able to pay your tax bills because of COVID-19, you may be eligible for support through Her Majesty’s Revenue and Customs’ (HMRC) Time to Pay service.
For more information, please call 0800 0159 559 or check the HMRC site here.