Coronavirus - Self Employment & Self Assessment

Last updated, 30 March 2020 at 8:20pm

Coronavirus Self-Employment Income Support scheme.

This will see self-employed individuals able to apply for a grant worth 80% of their average monthly trading profit over the last three years, up to £2,500 a month.

HMRC will use the average trading profits from tax returns in 2016-17, 2017-18 and 2018-19 to determine the size of the grant

The grants will be available to individuals across the UK for at least three months, and longer if necessary.

Unlike the employee scheme, the self-employed can continue to work. The scheme also applies to members of partnerships.

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 their income in these periods must come from self-employment.

The scheme will cover the three months to May. Grants will be paid in a single lump sum instalment covering all 3 months, and will start to be paid at the beginning of June.

Qualifying individuals 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.

To minimise fraud, only those who are already in self-employment and meet the above conditions will be eligible to apply. HMRC will identify eligible taxpayers and contact them directly with guidance on how to apply. The government has said that there must be a 2018/19 tax return in place to qualify.

HMRC expect people to be able to access the scheme no later than the beginning of June.

To make sure no one who needs it misses out on support, the Government are allowing anyone who missed the filing deadline in January, four weeks from today (26th March) to submit their 2018/19 tax return.

Please contact us if you require any assistance in filing an outstanding 2018/19 tax return.

The Government has also expanded the Coronavirus business support loan (see below) to allow self employed business to apply for an interest free loan for the first 12 months.

"It is now very crucial that any self-employed person that has not filed a 2018/19 Self Assessment Tax Return (due 31 January 2020) do so immediately. 

The government has granted an amnesty and have allowed a four week window to submit the form and still qualify for the grant so it is imperative that you do so soon" - Hayden Watson, Director

Self Employed Self Assessment

  • The second payment on account that is normally due by 31 July 2020 has now been delayed until 31 January 2021.
    This is an automatic offer with no applications required.  No penalties or interest for late payment will be charged in the deferral period. It is not yet clear whether this measure applies to individuals who are not self-employed but are otherwise required to make a tax payment in July e.g. Landlords.

  • The self-employed will get full Universal Credit at a rate equivalent to statutory sick pay.

  • Government to offer financial support to self-employed individuals and employees earning below the National Insurance Lower Earnings Limit through a ‘new style’ Employment and Support Allowance and Universal Credit.Available to those affected by coronavirus or self isolating in accordance with government advice.  Applies from the first day of sickness rather than the eighth. Universal Credit and advanced payments will be available without the current requirement to attend a job centre. The minimum income floor for Universal Credit will be temporarily relaxed for the duration of the outbreak.  Self employed individuals will be able to claim compensation for losses in income.

Tax Residency

 

An update to the rules determining an individual’s residence for tax purposes confirms that those who find themselves unable to leave the UK as a result of the coronavirus pandemic will be able to claim ‘exceptional circumstances’ with regard to their current tax residency status, in cases where they have to stay here for more than the 183 days permitted.
The tax authority warns that ‘whether days spent in the UK can be disregarded due to exceptional circumstances will always depend on the facts and circumstances of each individual case.’

Statutory Sick Pay 

  • Temporary new legislation allowing Statutory Sick Pay (SSP) to be paid from the first day of sickness rather than the fourth day for individuals who have coronavirus or who self-isolate in accordance with government guidelines.
    Employers will need to maintain records of employee absence and SSP.

  • Temporary extension of SSP to cover individuals who are unable to work because they have been advised to self-isolate and those caring for others within the same household who display coronavirus symptoms and have been advised to self-isolate.
    Employers will need to maintain records of employee absence and SSP.

  • Employers with fewer than 250 employees as at 28 February 2020 will be eligible for a refund of SSP costs relating to coronavirus (restricted to two weeks per employee).
    The size of an employer will be determined by the number of people they employed as of 28 February 2020.
    Employees are not required to provide a GP fit note.
    Employers will need to maintain records of employee absence and SSP.
    The Government have announced that they will work with employers over the coming months to set up repayment mechanisms.
    A rebate scheme is being developed. Further details will be provided in due course once the legalisation has passed.

  • To relieve pressure on GPs, self-isolating employees will be able to obtain a notification via NHS111 which can be used as evidence for absence from work.

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