Self Employed Income Support Scheme

The new ‘Self employed Income Support Scheme’ has been launched.

Today the Rishi Sunak, Chancellor of the Exchequer, has announced support for the self-employed. This covers 95% of people who receive the majority of their income from self-employment.

How much will I be entitled to?

A cash grant worth 80% of your average monthly trading profit over the last three years will payable around June.

The scheme will be open to those with a trading profit of less than £50,000 in 2018-19 or an average trading profit of less than £50,000 from 2016-17, 2017-18 and 2018-19.

To qualify, more than half of your income in these periods must come from self-employment and you must have filed a tax return for 2018-19. 

If you haven’t yet filed this, you have four weeks to do so to qualify for the scheme.

How do I apply?

Self-employed people who are eligible for the new 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 should not contact HMRC now. HMRC will use existing information to check potential eligibility and invite applications once the scheme is operational. HMRC will identify eligible taxpayers and contact them directly with guidance on how to apply, you do not need to do anything right now.

Which period will this cover?

The income support scheme will initially cover the three months to May. 

Grants will be paid in a single lump-sum installment covering all 3 months and will start to be paid at the beginning of June.

To minimise fraud, only those who are already in self-employment and meet the above conditions will be eligible to apply. 

I pay myself a salary through my limited company – am I eligible?

If you pay yourself a salary and dividends through your own company, then you are not covered by the Self Employed Income Support Scheme but will be covered for their salary by the Coronavirus Job Retention Scheme if you are operating a PAYE scheme.

Does this scheme apply to partnerships?

Yes, this scheme also applies to members of partnerships.

My profit was in excess of £50,000 per year do I qualify?

No

I did not make a profit over the past 3 years so do I qualify?

We are awaiting further advice on this. We will update this page once we know.

Can I access any other help?

Before grant payments are made, the self-employed will still be able to access other available government support for those affected by coronavirus including more generous universal credit and business continuity loans where they have a business bank account. 

The loan is interest-free. You can also defer tax payments including VAT and the July self-assessment tax payment.

Please read our blog here on the other available help 

Does this scheme only apply if I am earning nothing currently?

No, if you are still able to trade then you can do so and still apply for help under this scheme.

 

We will continue to update you on any further developments.

Support for businesses during the Coronavirus Outbreak

The situation is changing daily, and we are receiving updates regularly. We have decided to share what we know are facts. If more help becomes available, we will update you.

If you own a business or you are self-employed, we know this is a worrying time for you. People are misinterpreting the help available. Much of the available help is for companies with employed staff and premises.

These options are available to everyone: 

Mortgage payments

Speak to your lender. Most are providing up to 3 months payment holiday. You will still have to make up the payments and do consider the interest implications we recommend you get advice from your lender.

Embargo on evictions                                

This will help people who rent their property. This will be hard for landlords. Talk to your landlord and negotiate.

Tax payment deferral 

By calling HMRC you may be able to negotiate payments for any impending taxes due (corporation tax, PAYE, VAT, income tax). They will want to know more about your circumstances, and this is decided on a case by case basis.

Valued Added Tax (VAT) payments can be deferred for 3 months. The deferral will apply to payments due between 20 March 2020 until 30 June 2020.

No applications required. Businesses will not need to make a VAT payment during this period. Taxpayers will be given until the end of the 2020/21 tax year to pay any liabilities that have accumulated during the deferral period. VAT refunds and reclaims will be paid by the government as normal.

Self-Assessment for income tax, payments due by the 31 July 2020 will be deferred until the 31 January 2021.

No penalties or interest for late payment will be charged in the deferral period for VAT or income tax.

Tax helpline number 0800 0159 559.

You will still have to pay any VAT or income tax you owe; you just can defer it with no late payment fees. 

Universal Credit 

If you are self-employed you may be entitled to Universal Credit – check here for more details

Council Tax reduction 

Check if you can claim a council tax reduction – apply to your local council. This is a standard benefit for people on a low income.

For companies with employees and/or premises

Statutory Sick Pay 

The government will refund Statutory Sick Pay which has a rate of £94.25 per week per person for two weeks from the start of sickness. Applies to businesses with up to 249 employees from 13 March 2020. The system to claim is not yet in place. It will probably be an enhanced credit through the PAYE system. Make sure your records are up to date. More details here We suggest you (or your payroll provider) keep manual records of dates of sick leave to enable the claim once a system is in place.

Business Loan Scheme (CBILS)

A maximum loan of £5m per business can be applied for which is interest-free for 12 months. This will be available to all businesses without adequate security to support the level of borrowing needed to keep their business trading. More details here

Small Business Grant Scheme 

This is to support small businesses that already pay little or no business rates because of small business rate relief (SBBR), rural rate relief (RRR) and tapered relief. This will provide a one-off grant of £10,000 to eligible businesses to help meet their ongoing business costs. You are eligible if:

  • your business is based in England
  • you are a small business and already receive SBBR and/or RRR
  • you are a business that occupies a property

You will be contacted by your local authority if you are eligible.

Retail and Hospitality Grant Scheme

This is for businesses in the retail, hospitality and leisure sectors with a cash grant of up to £25,000 per property.

For businesses in these sectors with a rateable value of under £15,000, they will receive a grant of £10,000.

For businesses in these sectors with a rateable value of between £15,001 and £51,000, they will receive a grant of £25,000. You are eligible if:

  • your business is based in England
  • your business is in the retail, hospitality and/or leisure sector

and if you trade:

  • as shops, restaurants, cafes, drinking establishments, cinemas and live music venues
  • for assembly and leisure
  • as hotels, guest and boarding premises and self-catering accommodation

Coronavirus Job Retention Scheme

All UK employers will be able to access support to continue paying part of their employees’ salary for those employees that would otherwise have been laid off during this crisis.

How to access the scheme you will need to:

  • designate affected employees as ‘furloughed workers,’ and notify your employees of this change – changing the status of employees remains subject to existing employment law and, depending on the employment contract, may be subject to negotiation
  • submit information to HMRC about the employees that have been furloughed and their earnings through a new online portal (HMRC will set out further details on the information required)

HMRC will reimburse 80% of furloughed workers wage costs, up to a cap of £2,500 per month. HMRC are working urgently to set up a system for reimbursement. Existing systems are not set up to facilitate payments to employers. If we run your payroll we will be monitoring this and help you with your reimbursements.

Business Rates Holiday 

For retail, hospitality and leisure businesses in England for the 2020 to 2021 tax year, there will be a business rate holiday. Types of businesses this will apply to are –

Shops, restaurants, cafes, drinking establishments, cinemas and live music venues. Any venue used for assembly and leisure which includes as hotels, guest & boarding premises and self-catering accommodation.

You will be contacted by your local authority.

Businesses that received the retail discount in the 2019 to 2020 tax year will be rebilled by their local authority as soon as possible.

Other advice

  • Keep on top of your credit control
  • Think twice about business decisions in such a critical time
  • Be mindful of expenditure

Where else can you find information?

For more information visit the Coronavirus Government Website pages CLICK HERE

Telephone: 0300 456 3565

Monday to Friday from 9 am to 6 pm