A week is a long time…
Harold Wilson is credited with the famous ‘a week is a long time in politics’ phrase from the 1960s, that seems like a dramatic understatement in today’s political landscape given that the government seems to be cramming an awful lot into a day! Following on from our previous blog about coronavirus loans, grants and schemes, we can bring you up to speed with the latest from Rishi Sunak, which brings some reassurance if you’re self-employed. Giving you the potential to receive direct cash grants for at least 3 months through a ground-breaking UK-wide scheme to help during the outbreak.
Chancellor gives support to millions of self-employed individuals
As of 26 March, the Chancellor’s latest announcement gives hope to the thousands of people affected in the sport and media industry in the UK who could now benefit from the new Self-Employed Income Support Scheme. Those eligible will receive a cash grant worth 80% of their average monthly trading profit over the last three years.
Recognising that self-employed people are a crucial part of the UK’s workforce and need reassurance and support, the Chancellor has now produced a package that he cites as one of the most generous in the world announced so far. It targets support to those who need help most, covering 95% of people who receive most of their income from self-employment, bringing parity with the recently announced Job Retention Scheme.
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.
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 Showbiz Accountant can help you with any aspect of your application.
The income support scheme, which is being designed by HMRC from scratch, will cover the three months to May and grants will be paid in a single lump-sum instalment covering all 3 months. However, this will not start to be paid until the beginning of June. You’ll no doubt want to know the amount you’re likely to be paid and how you might overcome cash flow issues till then. Call us at the Showbiz accountant for a free, tailored consultation and we’ll point you in the right direction.
Who qualifies?
- Those in self- employment (i.e. submitted tax returns) or are a member of a partnership.
- Those with a trading profit of less than £50,000.
- Those who are trading or would be except for COVID-19 and have lost trading/partnership profits.
- Those who intend to continue to trade in the tax year 2020-21.
- Excludes those working through Limited Companies.
If you started trading between 2016-19, HMRC will only use those years for which you filed a Self-Assessment tax return.
Importantly – If you have not submitted your Income Tax Self-Assessment tax return for the tax year 2018-19, you can do this by 23 April 2020. The Showbiz Accountant can help prepare these in time for a fixed fee of £350.
How much will you get?
- You’ll get a taxable grant, paid in one cash sum covering the period 1/3/20 -31/5/20 and this will be 80% of the average profits from the tax years 2016-17, 2017-18 and 2018-19 (where applicable).
- This will be up to a maximum of £2,500 per month for 3 months and HMRC will pay the grant directly into your bank account, in one instalment.
When will it be paid?
- Grants will start to be paid at the beginning of June 2020.
How can I access help?
- Individuals should not contact HMRC now as they will use existing information to check potential eligibility and invite applications once the scheme is operational.
- Talk to a member of The Showbiz Accountant team. We’re offering a tailored telephone consultation – free if you’ve not yet filed your tax return, you wish to understand the scale of your individual grant or access other sources of help to ease cash flow worries until June.
Those who pay themselves a salary and dividends through their own company are not covered by the scheme but will be covered for their salary by the Coronavirus Job Retention Scheme if they are operating PAYE schemes. We can advise you about the tax implications for your limited company.
The scheme has been designed after extensive engagement with stakeholders including the TUC, the Federation of Small Businesses and IPSE – The Association of Independent Professionals and the Self-Employed and individuals are already benefitting from a series of measures announced by the Chancellor to boost household incomes. With such a lot going on in such a short space of time, we are well placed to support all occupations in your industry while we wait for the new scheme to be rolled out.
Rather than getting anxious about how to apply to HMRC for the taxable grant, get help from The Showbiz Accountant, we’ll be able to guide you with anything needed. Accountants can help during the coronavirus – give me a call on 0151 317 7150 or email info@theshowbizaccountant.com to discuss this further.
Most importantly however, we hope you’re finding your own way to get through.
‘Hope is being able to see that there is light despite all of the darkness’
I look forward to the day when I don’t have to finish with – stay safe!
