This page will be used to update clients on the ever changing advice and assistance provided by HM Government.
Updated detailed advice on the Self Employed Income Assistance from our partners at Croner Taxwise (27th March 2020 13:00):
CORONAVIRUS (COVID-19) SELF-EMPLOYMENT INCOME SUPPORT SCHEME
THIS SUMMARY IS SUBJECT TO CHANGE AT SHORT NOTICE AS THE GOVERNMENT RELEASES ITS OWN UPDATES – THIS SUMMARY WAS LAST UPDATED FRIDAY 27th MARCH 2020 @ 10.08am
VAT QUESTION OF THE WEEK - DETAIL FROM OUR PARTNERS CRONER TAXWISE ON VAT DEFERRALS:
Following Chancellor, Rishi Sunak’s announcement on 20th March 2020 that VAT payments are set to be deferred to help businesses through the COVID19 pandemic, we take a look at the most commonly asked questions our Advice Line has received so far.....
NEWS: CHANCELLOR ANNOUNCES SUPPORT PACKAGE FOR SELF EMPLOYED WITH AVERAGE TAXABLE INCOME OF UP TO £50,000 PER ANNUM 26/03/2020 17:50HRS
EXCERPT FROM SKY NEWS:
The chancellor has announced that self-employed people will be able to claim a grant worth 80% of their average monthly profits - up to £2,500 a month.
Rishi Sunak said the support for those affected by the coronavirus crisis would be in place for at least three months and amounted to "one of the most generous packages in the world".
Unveiling the measures at a Downing Street news conference, the chancellor said the scheme was open to anyone with trading profits of up to £50,000.
But it will only be available to those who make the majority of their income from self-employment and who filed a tax return for 2019.
This would ensure only the "genuinely self-employed" benefit from the scheme and minimise the risk of fradusters applying for help, Mr Sunak added.
The chancellor said the support would help 95% of people who are majority self-employed, with Mr Sunak saying those who were not eligible had average earnings of more than £200,000.
But the government's action was criticised after the chancellor suggested the self-employed may have to wait until the beginning of June to access the scheme.
Some excellent detail by our partners Croner Taxwise on employee assistance.
Self Employed Individuals - A Ray of Hope for COVID-19 affected Self-employed people (updated 25/03/2020 20:20hrs)
Although we are all awaiting news on support for the self- employed there is some ray of hope - the Chancellor is expected to announce guidance on this point tomorrow. Our regulatory body the ACCA has shared the following document which is from the HoC order of business papers:
Measures to support businesses experiencing increases in costs or financial disruptions
Financial Assistance Business Rates holiday
Current information from HMRC:
Employers Assistance re Covid19
It appears that the government will bank roll employers and pay up to 80% of the gross wages for employees furloughed (layed off) – this will cover you somewhat for some of the team should you be unable to open. Detail is not available as yet but it will be based on payroll costs. Here’s the link https://www.gov.uk/government/publications/guidance-to-employers-and-businesses-about-covid-19/covid-19-support-for-businesses
Advice from our partners at Croner Taxwise as at 23/03/2020 :
Support for Businesses
Coronavirus Job Retention Scheme
HMRC will set up a new online portal so that ALL UK employers, regardless of size, will be eligible for assistance where an employee has been designated as a ‘furloughed worker.’ HMRC will reimburse 80% of furloughed workers wage costs, up to a cap of £2,500 per month. The current plan is that this will be in place for 3 months, at which point it will be reviewed. This will be backdated to 1 March 2020.
Employers must set out which of their employees are ‘furloughed workers’ and inform particular employees.
Furlough is the equivalent of lay off. So you can lay off staff, continue to pay them and recover 80% of that cost up to £30k per annum.
The current guidance states ‘You will remain employed while furloughed. Your employer could choose to fund the differences between this payment and your salary, but does not have to’
Changing the status of employees remains subject to existing employment law and, depending on the employment contract, may be subject to negotiation. Our HR support line can help (0844 892 2807).
Deferment of VAT payments
VAT payments can be deferred for up to 3 months. Again, all UK businesses will be eligible and the scheme will run between 20 March 2020 and 30 June 2020. There is no need to apply for this scheme. Businesses will be given until the end of 2020/2021 to settle outstanding VAT liabilities that have accumulated as a result of the 3-month deferral.
Time to Pay
Any business that pays tax to the UK government and has outstanding tax liabilities will be able to apply for their case to be reviewed by HMRC with a view to arranging a bespoke time to pay agreement. This applies to all businesses including the self-employed. HMRC has set up a dedicated helpline: 0800 0159 559.
Statutory Sick Pay
Employers will be able to reclaim up to 2 weeks of SSP payments per employee where those SSP payments related to Coronavirus. This applies to all UK employers with 250 employees or less as at 28 February 2020. The reclaim will not be via RTI, instead, HMRC will set up a new portal to facilitate this.
IR35 for the Private Sector
Changes to the IR35 off-payroll working rules in the private sector have been delayed by 12 months to April 2021.
HMRC will introduce a business rates holiday for retail, hospitality and leisure businesses in England for the 2020/2021 tax year. No action is required and this will apply to your next council tax bill in April 2020 meaning that there would be no rates payable for those businesses for 2020/2021.
The retail, hospitality and leisure sectors in England can also apply for a cash grant of up to £25,000 per property. For rateable values of under £15,000, they will receive £10,000. Between £15,001 and £51,000, they will receive a grant of £25,000. No action is required as local authorities will write to eligible businesses. Smaller businesses within the Small Business Rate Relief or Rural Rate Relief will of £10,000.
Business Interruption Loan Scheme
The British Business Bank will launch a scheme from the week commencing 23 March 2020 to support businesses with a turnover of no more than £45 million per year. The government will provide lenders with a guarantee of 80% on each loan. This applies to loans of up to £5m. No interest will be charged for the first 12 months.
Corporate Financing Facility
The Bank of England will shortly announce plans to buy short term debt from larger companies that are ‘fundamentally strong’. We are currently waiting for a definition of ‘fundamentally strong’.
If a company’s accounts are unlikely to be filed on time owing to being affected by Coronavirus then an application can be made to extend the period allowed for filing. Here is a link. If an application is not made and there is a late filing then the normal penalty regime would apply, so it is important to make the application ahead of the deadline.
Support for individuals
The 2nd payment on account of tax that is due by 31 July 2020 will be deferred until 31 January 2021. Self-employed taxpayers are eligible for this deferment. There is no need to apply for this offer to apply. No penalties or interest for late payment will apply during this deferral period.
Statutory Sick Pay
Individuals will be eligible for SSP for the first day of absence if the absence is Covid-19 related. The individual will need to visit https://111.nhs.uk/ in order to obtain an isolation note in line with advice issued from Friday 20 March. They will still be entitled to the normal maximum of 28 weeks in any 3-year period with the same employer, however, there is no need to wait for 3 working days before they would be eligible where Covid-19 applies.
The self-employed will be eligible to make a claim for Universal Credit or new style Employment and Support Allowance. Self-employed people will receive a rate equivalent to SSP.
Mortgage and rent holiday
Tenants, as well as mortgage borrowers, can apply for a 3 month payment holiday. Interest will continue to be charged on any amount that they owe. The government has announced that they intention is that no one can be evicted from their home over the next 3 months where this applies.
Companies to receive 3-month extension period to file accounts during COVID-19
Businesses will be given an additional 3 months to file accounts with Companies House to help companies avoid penalties as they deal with the impact of COVID-19.... but you must apply in advance