Coronavirus: help for the self-employed

Sonja Dengler from Page Kirk's audit team discusses support available for the self-employed during the COVID-19 crisis.

We live in uncertain times. The things that were so familiar just a month ago – shopping, going to the gym, seeing friends, a steady income – have, for many of us, gone up in smoke. The government has already released plans to help businesses suffering because of COVID-19, and on 26 March they announced a scheme to aid the self-employed whose income has dried up because of the coronavirus and the associated lockdown.

Summary of benefits

The scheme aims to help the self-employed who have been adversely affected by the coronavirus. It will allow you to claim a taxable grant worth 80% of your trading profits up to a maximum of £2,500 per month for the next three months (March - May). This will not be repayable, and the Government has added that the duration of the grant will be extended if necessary.

The grant will be paid directly into your bank account in one instalment in June, backdated to 1 March 2020.

Eligibility

All self-employed and members of partnerships who meet the following criteria are eligible:-

• They have submitted a Self-Assessment tax return for the tax year 2018-19. If this hasn't happened yet, it must be completed by 23 April 2020.
• They have traded in the tax year 2019-20 (6 April 2019 – 5 April 2020)
• They are trading when they apply (or would be except for COVID-19)
• They intend to continue to trade in the tax year 2020-21
• They have lost trading/partnership trading profits due to COVID-19

Your self-employed trading profits must also be less than £50,000 and more than half of your income is from self-employment. This is determined by at least one of the following conditions being met:- 

• Having trading profits/partnership trading profits in 2018-19 of less than £50,000 and these profits make up more than half of your total taxable income
• Having average trading profits in 2016-17, 2017-18 and 2018-19 of less than £50,000 and these profits make up more than half your average taxable income for the same period

If you need help with submitting your outstanding tax return for 2018-19, please contact our tax department on 0115 955 5500 or email enquiries@pagekirk.co.uk.

It appears at the moment that for those people that commenced self-employment in 2019-20 then they are not eligible to apply under this scheme.

How to access the scheme

Applications for this scheme are not currently open. HMRC has said that there is no need to contact them directly as they will contact those who are eligible. If you think you are entitled to claim, but do not hear from HMRC then please let us know.

Please also be aware of the increasing volume of spam emails claiming to be from HMRC and treat all emails asking for your personal information with caution.

Other help available for the self-employed

Although this scheme is a welcome help for many, the benefits will not be seen until June. For additional assistance, during this ever-changing time please consider the following:

• Deferral of Self-Assessment Income Tax payments due in July 2020 until 31 January 2021 and VAT payments due from 20 March 2020 until 30 June 2020. There will be no late payment or interest charges during these periods of deferment.
• Grants for businesses that pay little or no business rates
• Increased amounts of Universal Credit
• Business Interruption Loan Scheme
• Directors of their own company paid through PAYE may be able to get support using the Job Retention Scheme.

We will update you on any further developments as the Government solidifies its plans to help people through this challenging time.