COVID-19 – Self-employment Income Support
Tonight we have heard the Chancellor announcing plans to support the self employed through this financially difficult period.
Although some of the finer details are yet to be confirmed, we have summarised the contents of tonight’s announcement below:-
1. Taxable grants available for the self-employed which will be equal to 80% of their average monthly profits over the last 3 years (tax years 2016/17, 2017/18 and 2018/19), capped to a maximum of £2,500 per month
2. These grants are expected to be available at the beginning of June when they will pay for up to three months in one paymen
3. The grants are available to all self-employed people where all of the following applies:-
– The majority of their taxable income is from self-employment, i.e. over 50% of your income
– They have annual profits of up to £50,000 – this is determined by either an average of the last three years’ profits or just their profit for 2018/19
– They have completed at least 1 year of self-assessment tax returns (2018/19)
– They have traded in 2019/20, are trading when the application is made and are intending on continuing to trade during the 2020/21 tax year
– They have lost trading profits due to COVID-19
4. The grants will not be available to newly registered self employed persons who have yet to submit a self-assessment tax return
Unfortunately, the application process has not been set up as yet and is not expected to be available for some weeks.
Short Term Solutions
As there will be some delay before these grants become available, the Government are urging businesses to take advantage of the other schemes already announced:-
Furloughing Staff – You can claim 80% of employees’ wages for a period of up to three months if you put their employment status on hold rather than laying them off (please see previous email for more details). This scheme is expected to be ready by the end of April but can be backdated for furloughed staff wages from the beginning of March
Business Grants – These are available to businesses who pay business rates or claim small business rates relief. Please note, the application process for these grants is now live (in Wales) and can be found on the following link (follow the section ‘Financial Support & Grants’). There are two grants available, please select the one which is applicable to your business and complete the online form. If your business is based in England, please click on the following link to find your local authority website for further information.
Business Rates Holiday – The Government have announced that businesses in the retail, leisure and hospitality sectors will benefit from a 12 month holiday from business rates. There is no application required for this, your local authority will re-invoice for 2020/21 at the reduced rate. Please see link for further information.
Business Interruption Loans – These are available at 0% interest for a period of 6-12 months. If you are eligible for one of the above grants, a business Interruption Loan could be used as a ‘bridging loan’ until the grant funds become available. Once the grant has been received you could repay the loan with no interest payable. You should contact your bank provider or click on the following link to see if you qualify for one of these loans.
Universal Credit – They are also advising individuals to check if they can claim Universal Credit, click here for further information.
Mortgage Holiday – Mortgage providers are offering 3 months payment holiday, please contact your mortgage provider to find out how to apply. Please note that interest will continue to be charged during this three month period and will be added to the balance of your outstanding mortgage
Business Property Rent – Landlords have been asked to be as flexible as possible for the next three months with the Government introducing a complete ban on evictions. We would recommend you discuss the issue with your landlord to see if they would allow a deferral of rent for 3 months or maybe a reduced rate, to be repaid at a later date