Helpline for the self employed: 0800 024 1222
Financial help for the self employed and individuals affected by Covid-19 is now available and comprehensive guidance is found on the GOV website.
The Self Employment Income Support Scheme (SEISS) is in the form of taxable grants for the self employed and summarised as follows:
- For the FIRST grant: HMRC will pay a grant initially worth 80% of average monthly profits over the last 3 years up to £2,500 per month (so tax years 2016/17, 2017/18 & 2018/19). To work out the average HMRC will add together the total trading profit for the 3 tax years (where applicable) then divide by 3 (where applicable), and use this to calculate a monthly amount.
- The first grant will be paid in a single lump sum instalment covering the 3 months to May, and will start to be paid at the beginning of June.
- The first grant claims should be made by 13 July 2020.
- For the first grant, HMRC will use existing information to check potential eligibility and start contacting individuals in the week commencing 4th May 2020. Check if you’re eligible here.
- The SECOND and final grant will be worth 70% of average monthly trading profits, covering 3 months of profits and capped at £6,570 in total; applications for this second grant open in August. Claimants for the second grant are required to confirm their business was adversely affected by Covid-19 on or after 14th July 2020. Claimants do not have to have claimed the first grant in order to claim for the second. Claim here.
- Cleaners, plumbers, electricians, musicians, hairdressers and many other self-employed people who are eligible for the scheme will be able to apply directly to HMRC for the taxable grant, using a simple online form, with the cash being paid directly into people’s bank account.
- Individuals must already be in the self employment system.
- The scheme is open to those with trading profits of £50,000 or less.
- Those eligible must derive more than half of their income from self employment.
- Those who pay themselves a salary and dividends through their own company are not covered by the scheme but will be covered for their salary by the Coronavirus Job Retention Scheme if they are operating PAYE schemes.
- Grants can only be made by claimants – agents cannot claim.
Under Time to Pay, the self-employed will get extra time to pay their tax liabilities, with late payment penalties and interest waived during the affected period.
The next self assessment payment due on 31 July 2020 will now be due by 31 January 2021. Eligibility is limited to the self-employed ie, the deferral does not apply to those that are in self assessment but are not self-employed. Our current understanding is that the deferral applies to any taxpayer who was self-employed in the 2018/19 tax year on which the payment on account is based. This is an automatic offer and no application is required. Self assessment returns should still be filed by their due date and it may be advantageous to file the 2019/20 return as soon as possible after 5 April 2020. This might facilitate planning for the tax payment due in January 2021 and perhaps crystallise any refund due, including as a result of any loss relief available.
Self employed people can now access full Universal Credit at a rate equivalent to Statutory Sick Pay (£94.25 per week). The rules around attending Job Centres have also been relaxed. Applications for Universal Credit can be made via this link.
Banks have agreed a 3 month mortgage holiday for individuals affected by the coronavirus. Lenders such as Nationwide have acted swiftly to assist but please approach your lender in the first instance to ask about a mortgage holiday.
HMRC website has further details.
Please contact Julia Gallagher to discuss what the measures mean for you. 01527 558539.