This page will be used to update clients on the ever changing advice and assistance provided by HM Government.
Check if you can claim a grant through the Self-Employment Income Support Scheme
***HMRC Eligibility Portal now open***
If you're self-employed or a member of a partnership and have been adversely affected by coronavirus (COVID-19) find out if you can use this scheme to claim a grant.
The portal to make your claim will be live from 13th May 2020 - payments could be made as early as 20th May 2020 - so check your eligibility now.
The scheme will allow you to claim a taxable grant of 80% of your average monthly trading profits, paid out in a single instalment covering 3 months, and capped at £7,500 altogether. This is a temporary scheme, but it may be extended. If you receive the grant you can continue to work, start a new trade or take on other employment including voluntary work, or duties as an armed forces reservist.
The grant will be subject to Income Tax and self-employed National Insurance.
HMRC will work out if you’re eligible and how much grant you may get. But you can follow these steps to help you understand how we will do this and what you can do now.
Who can claim
You can claim if you’re a self-employed individual or a member of a partnership and:
you traded in the tax year 2018 to 2019 and submitted your Self Assessment tax return on or before 23 April 2020 for that year
you traded in the tax year 2019 to 2020
you intend to continue to trade in the tax year 2020 to 2021
you carry on a trade which has been adversely affected by coronavirus
Check if you’re eligible to claim
You can use the HMRC online tool to find out if you’re eligible to make a claim. We can can also use the online tool on your behalf.
You’ll need your:
Self Assessment Unique Taxpayer Reference (UTR) number - if you do not have this find out how to get your lost UTR number
National Insurance number - if you do not have this find out how to get your lost National Insurance number
How much you’ll get
You’ll get a taxable grant based on your average trading profit over the 3 tax years:
2016 to 2017
2017 to 2018
2018 to 2019
HMRC will work out your average trading profit by adding together your total trading profits or losses for the 3 tax years, HMRC will then divide that by 3.
The grant will be 80% of your average monthly trading profits, paid out in a single instalment covering 3 months, and capped at £7,500 altogether. The online service will tell you how HMRC worked the grant out.
The grant amount worked out for you will be paid directly into your bank account, in one instalment.
Find out how we will work out your average trading profits including if you have not traded for all 3 years.
How to claim
The online service will be available from 13 May 2020. If you’re eligible, HMRC will tell you the date you can make your claim from. If your claim is approved you’ll receive your payment within 6 working days.
If you’re unable to claim online an alternative way to claim will be available. We will update this page with more information soon.
You do not need to contact HMRC now, as this will only delay the urgent work being undertaken to introduce the scheme.
Covid-19: business interruption loan scheme amended - Banks forced to relax rules for lending
Official figures from UK Finance show while there have been over 130,000 enquiries from businesses across the country for business interruption loans, just 983 businesses have had finance approved with £90m paid out.
Chancellor Rishi Sunak announced the CBILS programme is being extended so that all viable small businesses affected by Covid-19, and not just those unable to secure regular commercial financing, will now be eligible should they need finance to keep operating during this difficult time.
The government is also stopping lenders from requesting personal guarantees for loans under £250,000 and making operational changes to speed up lending approvals. The government will continue to cover the first twelve months of interest and fees.
For loans over £250,000, personal guarantees will be limited to just 20% of any amount outstanding on the CBILS lending after any other recoveries from business assets. Lenders were already prohibited from asking business owners to put their house on the line, but the changes are design to allay concerns regarding personal assets.
The new rule will apply to finance already offered under the scheme, to ensure that all business owners receive the same level of government protection.
In addition, there is a new Coronavirus Large Business Interruption Loan Scheme (CLBILS) which will provide a government guarantee of 80% to enable banks to make loans of up to £25m to firms with an annual turnover of between £45m and £500m. Loans backed by a guarantee under CLBILS will be offered at commercial rates of interest and further details of the scheme will be announced later this month.
Rishi Sunak, Chancellor of the Exchequer, said: ‘We are making great progress on getting much-needed support out to businesses to help manage their cashflows during this difficult time – with millions of pounds of loans and finance being provided to hundreds of firms across the country.
‘And now I am taking further action by extending our generous loan scheme so even more businesses can benefit. We have also listened to the concerns of some larger businesses affected by Covid-19 and are announcing new support so they can benefit too.’
Sunak said he will be speaking to bank chief executives next week to discuss how the schemes are working.
The government-backed scheme to provide financing to larger companies, being operated by the Bank of England, has also provided almost £1.9bn of support to firms and a further £1.6bn has been committed.
Adam Marshall, director-general, BCC (British Chambers of Commerce) said: ‘Improvements to the CBILS will help firms get access to cash more quickly, and the announcement of a new loan scheme for mid-sized companies closes a significant gap in existing support.’
Mike Cherry, National Chair, FSB (Federation of Small Businesses) said: ‘Time is of the essence and therefore we welcome government action in ensuring that any viable small business that has been negatively impacted by the Coronavirus can now directly access CBILS rather first being offered a bank’s own standard commercial lending product.
‘Removing personal guarantees for all commercial loans below £250,000 is also very welcome. Taking on debt at the current time is a daunting prospect for many small businesses and the self-employed.’
Additional Financial Support for Business - up to £50K 100% Government secured loans
Apply for a coronavirus Bounce Back Loan
This scheme helps small and medium-sized businesses affected by coronavirus (COVID-19) to access loans of up to £50,000.
The Bounce Back Loan scheme helps small and medium-sized businesses to borrow between £2,000 and £50,000.
The government guarantees 100% of the loan and there won’t be any fees or interest to pay for the first 12 months.
Loan terms will be up to 6 years. No repayments will be due during the first 12 months. The government will work with lenders to agree a low rate of interest for the remaining period of the loan.
The scheme will be delivered through a network of accredited lenders.
You can apply for a loan if your business:
is based in the UK
has been negatively affected by coronavirus
Who cannot apply
The following businesses are not eligible to apply:
banks, insurers and reinsurers (but not insurance brokers)
state-funded primary and secondary schools
If you’re already claiming funding
You cannot apply if you’re already claiming under the Coronavirus Business Interruption Loan Scheme (CBILS).
If you’ve already received a loan of up to £50,000 under CBILS and would like to transfer it into the Bounce Back Loan scheme, you can arrange this with your lender until 4 November 2020.
How to apply
The full rules of the scheme and guidance on how to apply is available on the British Business Bank website. Apply now
Covid-19: Government furlough scheme to pay employer NICs and basic Workplace pensions amounts
In a further update to the Coronavirus Job Retention Scheme guidance, the government has announced that it will now cover the employer national insurance (NI) and employer auto enrolment costs for furloughed staff
In addition to employer NICs, the government will also pay the minimum auto-enrolment (AE) pension scheme contributions employers have to pay on staff wages for furloughed staff. The employer minimum contribution rate is 3%, while employees have to pay 5%.
Most employers use pension schemes that from April 2019 require a total minimum of 8% contribution to be paid. The calculation for this type of scheme is based on a specific range of earnings.
For the 2019/20 tax year this range is between £6,136 and £50,000 a year (£512 and £4,167 a month, or £118 and £962 a week). These figures are reviewed each year by the government.
Under the Coronavirus Job Retention Scheme, employers can claim a grant covering 80% of the wages for a furloughed employee, subject to a cap of £2,500 a month.
Fees, commission and bonuses should not be included.
This gives a maximum cap of £2,500 +£245 (employers’ NIC) + £59 (auto-enrolment pension contribution) = £2,804 of total possible grant that can be applied for per employee per month.
Employees pay income tax, NICs and any other deductions from their wages, HMRC confirmed.
The Treasury says the latest move could save businesses an extra £300 a month for each employee under the scheme.
New guidance has also confirmed that those made redundant after 28 February 2020 can be re-employed and placed on furlough.
Those on furlough will also be permitted to volunteer without risking their pay - and will be able to join the 500,000 members of the public who have signed up so far to help the NHS during the coronavirus outbreak.
Auto enrolment pension rates
This table shows the minimum contributions employers must pay:
DateEmployer minimum contributionStaff contributionTotal minimum contribution
Rate: 6 April 2019 onwards3%5%8%
Source: The Pensions Regulatorour latest news and analysis at Accountancy Daily Coronavirus: essential updates for accountants and sign up to our free 4pm and weekly newsletters
HMRC technical guidance
HMRC Guidance for employee
Correct as at 16:25 30/03/2020
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
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
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.