The past week has seen more announcements by the Government to help businesses and individuals as the Country continues to fight the Coronavirus (COVID-19). The main announcement made on Thursday 26 March 2020 was the Coronavirus Self-employment Income Support Scheme to provide financial support for the self-employed and members of partnerships in the form of a taxable cash grant.
There has also been some further detail on previously announced assistance with the emergency legislation being passed last week.
Support for the Self-Employed:
The Coronavirus Self-employment Income Support Scheme will allow an individual to claim a taxable grant worth 80% of their trading profits up to a maximum of £2,500 per month for the next 3 months. This may be extended if needed.
The grant will be taxable and will be based on 80% of average profits over the last three tax years, where applicable. The grant will be paid directly into an individual’s bank account in one lump sum instalment.
Who can apply?
A self-employed individual or a member of a partnership can apply for the support if:
- They have submitted an Income Tax Self Assessment tax return for the 2018/19 tax year;
- They have traded in the 2019/20 tax year;
- They are continuing to trade when they apply, or would be trading except for COVID-19;
- They intend to continue to trade in the 2020/21 tax year;
- Trading/partnership trading profits have been lost due to COVID-19
- Self-employed trading profits are less than £50,000 and more than half of their income derives from self-employment. To qualify, one of the following must therefore apply:
- Trading profits must be below £50,000 and more than 50% of taxable income must come from those profits; or
- Average trading profits for 2016/17, 2017/18 and 2018/19 must be less than £50,000 and constitute more than 50% of taxable income in the same period
Self-employed individuals who have not submitted their Income Tax Self-Assessment tax return for the 2018/19 tax year have until 23 April 2020 to do so in order to be eligible for the scheme.
HMRC will use data on 2018/19 returns already submitted to identify those individuals eligible for the support and will risk assess any late returns filed before the 23 April 2020 deadline in the usual way.
How to apply
Applications cannot yet be made for this scheme. HMRC will contact eligible individuals and invite them to apply for the grant online.
Support for businesses through deferring Income Tax payments
HMRC have announced that Self-Assessment Income Tax payments on account due on the 31 July 2020 may be deferred until 31 January 2021. Individuals do not need to be self-employed to be eligible for the deferment.
The deferment is optional, and if you are still able to pay your second payment on account on 31 July 2020 you should do so.
Job Retention Scheme – Update
HMRC have also issued more detailed and updated guidance for UK employers on the support in paying their employees’ salary for employees who would otherwise be laid off. This is available at https://www.gov.uk/guidance/claim-for-wage-costs-through-the-coronavirus-job-retention-scheme.
Our Current working arrangement – We remain ‘Open for business’
Whilst like most businesses our office premises are currently closed, we wish to reassure our clients that we remain open and are available to help with the challenges presented by the current circumstances as well as continuing to provide our usual services.
Our staff have been and are continuing to work from home and can still be contacted in the usual way either via email or by calling the office number where reception will divert your call to the appropriate staff member.
Regarding the post, which we know many of our clients still choose to use, we are continuing to collect this on a regular basis however we would ask, wherever possible, to send documents to us electronically. We have a secure document sharing facility which can be used if you would prefer not to use email for sending confidential information. Should you not already have access to this facility please ask your usual Muras Baker Jones contact to set up this option for you.
If you would like more information about any of the matters raised this week please contact us.
To see our other news items please visit our Muras Baker Jones – Blog.