Raise your hand if you’re now longing for the ‘simple’ days of Brexit! As we find ourselves in these extraordinary, unprecedented times of social distancing, self-isolation, quarantining and lockdowns, uncertainty has never been higher. In this week’s blog, we breakdown the current situation in regards to what financial support is available for contractors and the self employed. We will update this blog as and when more measures are announced.
As of midday 15th May 2020:
Statutory sick pay (SSP)
Anyone who uses a PAYE scheme and finds themselves self isolating (whether symptomatic or not) is entitled to claim SSP of £94.25 per week from day 1 of being unable to work (this was previously day 3). Whereas before these measures, that money would have come out of the pockets of the business, the government have now committed to reimbursing small businesses for this cost.
Self Assessment payment deferral
If you completed a self assessment return for 18/19 and your tax liability was over £1000, then chances are, you would have had to make payments on account (in January 2020 and July 2020) towards your 20/21 liability.
The second payment on account due by 31st July 2020 has now been deferred until January 2021. You do not need to apply for this, you simply don’t pay the amount until January 2021, and no penalties or interest will be applied.
VAT payment deferral
Any VAT payments due between now and 30th June 2020 are now able to be deferred until April 2021.
Again, there is no need to apply for this, you simply don’t pay your VAT due. It is important however, that you set a reminder to ensure that this is paid by April 2021, and if you are still able to make your VAT payment, it is certainly advisable to still do so.
It is also worth noting that your VAT return will still be due for fi ling, so this will still need to be done.
HMRCs Time To Pay- new helpline
HMRC already offer their TTP service which allows people and companies to set up payment plans if they are unable to meet tax payment deadlines.
If you have missed, or are about to miss a tax payment then you can call the HMRC Covid-19 TTP helpline on 0800 0159559. If your next tax isn’t due for a while, please don’t call until nearer the time as the lines will be extremely busy.
Job Retention Scheme
Chancellor Rishi Sunak announced this scheme which is a grant to pay employees’ wages, who would otherwise have been made redundant during these uncertain times.
In order to claim, you would need to have employees that you designate as ‘furloughed workers’. Once furloughed, they are not allowed to work for you at all during this time. HMRC have set-up a new online portal, through which you are able to submit your claim. Your company will then be reimbursed up to 80%of their wages (up to £2500 per employee per month). This can be backdated to 1st March 2020.
It was announced on 12th May 2020 that this scheme would be extended in its current form up until the end of July 2020. Then, from August until October, it will be made more flexible, allowing employees to work part time whilst on furlough, but with the employer being required to contribute towards the furlough salary. More details on this second phase of furlough will be released in due course.
Universal Credit
If you are self employed and claiming UC, and have to self isolate, then the minimum income floor (assumed level of income) will not be applied for a period of time whilst you are affected.
Self Employment Income Support Scheme (SEISS)
This scheme was introduced to support the self employed whose income has suffered as a result of the crisis. This scheme provides a grant of up to 80% of profits (capped at £2,500/month) for sole traders and partnerships. However, you must meet certain criteria to be eligible:
• You must have fi led a tax return for the 18/19 tax year declaring self employed or partnership income.
• Your annual trading profits must be less than £50,000.
• At least half of your income must come from self employment.
Trading profit will be calculated either based on your 18/19 year profit, or an average of your profit in16/17, 17/18 and 18/19.
Coronavirus Bounce Back Loan Scheme
It was announced on 27th April 2020 that the government will be launching a scheme on 4th May 2020 to help small and medium sized businesses by guaranteeing 100% of loans between £2,000 and £50,000.Loans terms will be up to 6 years, there will be no interest or fees to pay in the first 12 months, and the government will be working with lenders to agree a low rate of interest.
You can apply for the loan if your business:
• Is based in the UK
• Has been negatively affected by coronavirus
• Was not ‘undertaking in difficulty’ on 31st December 2019.
You cannot apply if you are a bank, insurer, reinsurer, public sector body, grant or state funds schools or further education facilities. You can also not apply if you’ve already claimed under the Business Interruption Loan Scheme (but you can apply to transfer a loan of up to £50,000 under CBILS to the Bounce Back Loan scheme before 4th November 2020).
This is all of the information that we have currently but there are further resources and information onthe.gov website here. As and when there are changes from government, we will update this blog accordingly. In the meantime, stay safe.
PaperRocket Accounting provide accounting and tax services to professional contractors, freelancers, and small businesses working in the UK.
We offer our clients a flexible choice of fixed fee monthly packages which cover all of their accounting and tax needs (so no hidden costs or surprise bills!). All of our accounting packages include a monthly subscription for a cloud accounting software subscription provided by the awarding winning FreeAgent.
Each of our clients is given their own dedicated qualified accountant with unlimited access in person, telephone, or by email.
We pride ourselves on our client satisfaction and customer service and were awarded ‘Best Contractor Accountancy’ firm 2020 in The Contracting Awards and ‘Welwyn Hatfield Business of the Year 2019’ in the SME Hertfordshire awards.
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