COVID-19: Support for Self-Employed
Financial support for the self-employed
Although COVID-19 has been an uncomfortable time for many, as we pass the peak and begin to return to work, it is important for us to keep up to date with changes to the Government guidance.
This advice is applicable to you if you are self-employed and have lost income as a result of the pandemic. It does not apply to those trading through their own limited company (‘PSC’), who may be able to access some support through the Coronavirus Job Retention Scheme (‘Furlough Scheme’).
Self-Employment Income Support Scheme
The Self-Employment Income Support Scheme currently allows you to claim a taxable grant worth 80% of your average monthly trading profits. This is paid to you in a single instalment that covers 3 months’ worth of profits, capped at £7,500 in total.
This scheme has been extended: if you are eligible, you can apply to claim the first grant on or before 13 July 2020, and you can claim the second and final grant in August 2020.
- Have been trading in the 2018/19 tax year, and submitted your self-assessment tax return for that year on or before 23 April 2020
- Have been trading in the 2019/20 tax year
- Be intending to continue trading in the 2020/21 tax year
- Have lost trading profits due to Coronavirus.
This scheme is open to those whose trading profits are no more than £50,000 and for those who derive more than half of their income from self-employment.
If you are eligible…
If you have been identified as someone who is eligible for this scheme and would like to apply for the first grant, you will need the following to hand:
- Your Government Gateway user ID and password – if you don’t have one you can create one when you make your claim
- Your UK bank details, including:
- Bank account number
- Sort code
- Name on the account
- Your address linked to your bank account
- Proof that your business has been adversely affected by coronavirus.
If you are not eligible…
If you have applied and found that you are not eligible to claim Self-Employment Income Support, but believe that you are, feel free to contact us for help in determining your eligibility.
Please be aware that the online service has recently been updated. This means that if you submitted your returns between 26 March 2020 and 23 April 2020, you should check your eligibility again as you may now qualify to receive this grant.
Extension to the scheme
Since its implementation, the scheme has been extended to offer a second and final grant that you’ll be able to claim in August 2020.
If you’re eligible for this second claim, you can apply for a taxable grant worth 70% of your average monthly trading profits, capped at £6,570 in total. Like the first grant, this will be paid in a single instalment covering a further 3 months’ worth of profits.
If you need to defer your self-assessment tax payment
As a result of COVID-19, you can now delay making your second tax payment (those due up to 31 July 2020) on account. You will not be charged interest or penalties as long as you pay before 31 January 2021.
If you can’t pay your tax bill
If you’re VAT registered
- VAT returns’ payments for the periods ending in February, March and April
- Payments on account due between 20 March 2020 and 30 June 2020
- Annual accounting advance payments due between 20 March 2020 and 30 June 2020.
If you wish to defer payment, you do not need to do anything apart from cancel your VAT direct debit (if you have one set up), or cancel online if you’re registered for online banking.
HMRC will continue to process VAT reclaims and refunds as normal. There is also the ability for you to apply online to move to monthly returns to improve your cashflow.