Last night’s announcement was the one most were waiting for, but we are aware there are still many unanswered questions. We would like to thank you for your patience on answers which simply do not exist or have not been decided yet.
We have done a summary below of last nights briefing.
Yesterday the government announced that millions of self-employed individuals will benefit from a ground-breaking UK-wide scheme to help them during the coronavirus outbreak via direct cash grant of 80% of their profits, up to £2,500 per month.
In the latest step to protect individuals and businesses, Rishi Sunak has set out plans that will see the self-employed receive up to £2,500 per month in grants for at least 3 months.
Please note, you must have submitted a 2019 tax return with self-assessment income to qualify for this. If you have not yet submitted one (the statutory deadline was 31st January), the government are allowing a further 4 weeks for you to do so. 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.
Under 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.
This brings it in-line with the Coronavirus Job Retention Scheme.
To apply for the new scheme, HMRC will contact you regarding the taxable grant and using a simple online form will allow them to pay the cash directly into people’s bank accounts.
The income support scheme, which is being designed by HMRC from scratch, 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.
In the interim the government is encouraging people to apply for mortgage holidays, apply for universal credit or use a business interruption loan if required.
Individuals should not contact HMRC now. HMRC will use existing information to check potential eligibility and invite applications once the scheme is operational.
HMRC will contact you are expecting contact to be made in June, please be patient till this time.
Directors within Limited Companies
Those who pay themselves a salary and dividends through their own company are not covered by the scheme but should be covered for their salary by the Coronavirus Job Retention Scheme if they are operating PAYE schemes.
Don’t forget, if you have a self-assessment payment on account due on 31st July 2020, this is automatically deferred to January 2021, you do not need to do anything to apply for this.
The payment amount will still be due, but the deferral aims to assist with cashflow for individuals.