The other thing on your mind however is probably how these new measures of staying at home will impact your finances and the continuity of your business. Therefore, I wanted to do a round up of all the current support announced for those affected by COVID-19.
Self-employment income support scheme
Last night the Chancellor confirmed what has been a hot topic this week – there will be an income support for the self-employed in line with that already announced for employees.
Detailed guidance on this is yet to be published but the outline from yesterday’s briefing is as follows. This applies if you are self-employed or a member of a partnership:
- You can claim 80% of the average monthly profits, capped at £2,500, over the last three tax years (where applicable) starting with 2018/19 backwards. This claim is currently open for 3 months.
- If you haven’t submitted your 2018/19 tax return yet (which was due by 31 January 2020) you now have four weeks to get this submitted so these figures can be used for this claim.
- You need to have been trading in the current tax year (2019/20) and intend to continue to trade in the next tax year (if not for the impact of COVID-19).
- Your trading profits must be below £50,000 and more than half of your income must come from self-employment.
Due to the complexities of getting this in place however there is a delay in when they believe the monies will be physically paid. Currently this is stated as ‘expected by the beginning of June’ and HMRC will be writing to you in the meantime inviting you to claim when the system is up and running.
It was also previously announced that the self-assessment ‘payments on accounts’ that were due on 31 July 2020 have now been deferred until 31 January 2021 to help with cashflow.
In the meantime, the rules surrounding when you can claim Universal Credit have been relaxed for the self-employed meaning you can get it sooner if you are eligible.
Job retention scheme – Furlough guidance
Whilst the scheme fundamentally involves Employment Law, and appropriate advice would need to be sought, I have set out a summary of the rules below based on the detailed guidance published by HMRC.
All UK businesses are eligible if they employ staff and had a PAYE scheme set up on or before 28 February 2020. Once you know your ‘designated employees’ Employers can use a portal to claim for at least three months starting from 1 March 2020.
The amount claimable is 80% of the usual monthly wage costs, up to £2,500 a month, plus the associated Employer National Insurance contributions and minimum automatic enrolment employer pension contributions on that wage.
Should the wages not be regular each month, an appropriate average (depending on how long they have been employed with you for) should be used. Detailed guidance and scenarios can be found in the published guidance on the gov.uk website.
You can only submit one claim at least every 3 weeks, which is the minimum length an employee can be furloughed for (per HMRC’s guidance) and claims can be backdated until the 1 March if applicable. Once the claim has been approved, HMRC will pay this in the business bank account. This is expected to be up and running by the end of April.
Other support available
- Any VAT payments due between 20 March and 30 June 2020 can be deferred until 5 April 2021. This is automatic and does not need to be applied for, however you must cancel any direct debit already in place in plenty of time before the due date. Any reclaims due will be received as normal.
- Small business grant funding is available if you are based in England and qualify for small business or rural rates relief by occupying premises. Your local authority will be writing to you regarding how to claim a one-off grant of £10,000
- Grants available for those in the Leisure, Hospitality and Retail industry of up to £25,000 per property depending on rateable value. Also, no rates payable for these industries for 2020/21 and your local authority will write to you in both instances (where eligible).
- ‘Business interruption loan’ scheme supported by the government to give businesses access to loan finance may be available from your bank.
- Statutory sick pay that has been paid to staff can be reclaimed back for up to two weeks where time of is in relation to the Coronavirus. This isn’t ready just yet to claim, but should be soon.
- Time to pay arrangements can still be put in place with HMRC for all businesses (including the self-employed) that already have outstanding liabilities that they are unable to now pay.
If you have made it this far – well done! Should you need any advice or guidance in regard to your business affairs please do get in touch.