Coronavirus Update: Support for the Self-Employed
Self-Employment Income Support Scheme (SEISS)
The Government have launched an initiative for the self-employed, known as the Self-Employment Income Support Scheme (SEISS) which is to support those who are self-employed and who have lost income as a result of the COVID-19 pandemic. The scheme will also apply to individual partners of partnerships.
The scheme will allow a self-employed individual to claim a taxable grant covering 80% of their trading profit up to the maximum value of £2,500 per month for the next three months.
There are certain conditions that must be met;
You must have submitted your 2019 Tax Return (or you have until 23 April 2020 to do so if you have not done)
You must still be trading and thus be trading when you apply for the grant
You must have traded in the tax year to 5 April 2020 (2019/20)
You must have lost profits due to COVID-19
You must also meet one of the two following conditions;
Your average self-employed profits for the three tax years to 2018/19 (or if less the period since started trading) are less than £50,000 and more than half of your average taxable income for the same period, or
Your self-employed profits for 2018/19 are less than £50,000 and more than half of your taxable income for that year
The grant will be taxable and will not be available until later this year, towards June, and will be paid as lump sum bank transfer. There is not yet a mechanism to apply for this and HMRC will initially write to those taxpayers that qualify and will then request a claim is submitted. There is no need to contact HMRC at this stage and we would recommend that you bring your tax affairs up to date.
Payments on Account
HMRC will be deferring the 31 July 2020 payment on account, which means that you do not need to pay your second payment on account usually due in July, for this year. This is automatic and does not need to be applied for, and no interest or penalties will be charged. The payment will instead be due on 31 January 2021, together with the balancing payment and the first payment on account for the following year. We would recommend that wherever you can you keep sufficient funds aside so that you do not fall short in January 2021.
VAT Deferment
If you are VAT registered and have a VAT payment due before 30 June 2020, this can be deferred for a period up to 31 March 2021. You will need to submit your VAT Return as usual but no action is required to defer the payment unless you have a direct debit in place, which you will need to cancel. Repayments will be issued as normal.
Coronavirus Business Interruption Loan Scheme (CBILS)
The Government have announced a loan scheme, provided by the British Business Bank through participating providers, which is available now and you can read more about this scheme here. This will provide many opportunities to borrow and take finance whilst having difficulties with cashflow. The loans are interest free and fee free for 12 months but not always be available, depending on your circumstances. We are partners with Capitalise, a lending search hub, who can help you source a suitable loan if you own bank will not lend.
We will be updating this page as more information becomes available.