How is everyone?! I feel a bit of cabin fever is kicking in for me having not left the house since last Thursday. Thankfully its been glorious weather outside for us to enjoy some precious time with the boys 😊. To give an insight into my current situation… Jude is currently sat right up against me (even though there is plenty of room the other side of the sofa) chatting to Siri about cheetah’s coats!?! So, I think it’s safe to say the whole household is going a tad crackers.
Anyway, moving on to more pressing matters. The recent announcement for the Self Employed, please share with your friends and family that are looking for help. The self-employment guidance refers to sole traders and partnerships. Please note, if you a company director/shareholder then it will be the furloughed route to obtain a reclaim of 80% of the salary figure.
HMRC will use the previous three years tax return figures submitted to average your earnings out to determine the grant amount payable to you, if you haven’t got three years they will work with what you have submitted. If there are any stragglers that haven’t completed their 2018/19 return, get into gear and get it submitted before 23rd April.
The grant will be up to £2,500 a month or 80% of average earnings, therefore, the maximum you will get is £7,500 in a single lump sum , this will be classed as income and will be subject to tax and will go on to your 2020/21 tax return. If I act as your accountant I will sort this for you so don’t panic.
Copied from HMRC full guidance https://www.gov.uk/guidance/claim-a-grant-through-the-coronavirus-covid-19-self-employment-income-support-scheme – You can apply if you’re a self-employed individual or a member of a partnership and you:
- have submitted your Income Tax Self-Assessment tax return for the tax year 2018-19
- traded in the tax year 2019-20
- are trading when you apply, or would be except for COVID-19
- intend to continue to trade in the tax year 2020-21• have lost trading/partnership trading profits due to COVID-19
I have seen some people mentioning that they do not apply as they do not meet the first point above. However, I believe they will be using this so they can check the information that is readily available on their system. As you will see from their guidance, you cannot apply for this scheme yet and they will let you know if you are eligible. Be vigilant with calls, text and emails as the scammers are up to no good already!
In my opinion, I cannot believe that people that have started self-employment in 2019/20 will be ignored. I recommend that you submit your 2019/20 tax return as early as possible in case there are further announcements, amendments to the scheme. This will also give you a definitive income figure that you can use for tax credit applications/Universal Credit applications. It will also give you sufficient time to plan for the tax bill in January 2021. For anyone in the CIS industry that may be entitled to a CIS tax refund get it in early to keep your cashflow afloat.
If not already done so, I suggest you set up a self-assessment online account with HMRC https://www.access.service.gov.uk/login/signin/creds. Do this as a priority as the guidance states that they will be asking you to apply through GOV.uk online. It may be worth setting up a personal tax account too online https://www.gov.uk/personal-tax-account/sign-in/create-account?_ga=1432279175.1579982385.
For anyone that needs their income to be propped up you can claim Universal Credit, you can apply online https://www.gov.uk/apply-universal-credit. Martin Lewis has a useful tool to check what you may be entitled too https://moneysavingexpert.entitledto.co.uk/home/start.
I have also included a link to the FAQ’s https://www.businesssupport.gov.uk/self-employment-income-support-scheme-faqs/.
So to summarise, if you meet the criteria above then you will be eligible to something. If you started in the 19/20 tax year lets get things submitted early too so you can proactively plan ahead.
If you have any questions drop them in an email and I will try and give you a call back to discuss them.
All the best