There have been a number of changes and updates again for everyone this week. This is a follow on from last weeks post, which you can find here https://zebraaccountants.com/covid-19-what-help-can-you-get/
ARE YOU SELF EMPLOYED ?
The biggest news this week is that the government are stepping in to help those of you that are self employed. I can hear the collection sigh of relief from here !
Are You Eligible?
In order to claim the self employed grant you need to meet the following criteria
- be self employed OR a member of a partnership
- have submitted your UK tax return to 5 April 2019
- have traded for the whole of the current tax year
- are currently trading OR would be trading except for COVID-19
- intend to continue trading for the year ended 5 April 2021
- have lost trading / partnership profits due to COVID-10
You are not eligible if
- your business has not been affected by COVID-19
- your self employed profits are more than £50,000 on average over the 3 years
- you earn more than 50% of your income from PAYE employment income
How Much Will I Get?
You will receive a taxable grant, which will be 80% of the average profits from the tax years ended 5 April 2017, 5 April 2018 and 5 April 2019, where applicable.
The grant will be restricted to £2,500 and will be for a maximum of 3 months.
How Do I Apply?
You CANNOT apply for this scheme yet.
HMRC will contact you if you are eligible and you will then be able to apply online – https://www.gov.uk/
Please note : There are lots of SCAMS going around at the moment via text, email. calls and post – please DO NOT give our your details to ANYBODY – they are not going to have you arrested or stop your payment, they are trying to steal your money
After You Have Applied
Once HMRC has received your claim, and established that you are eligible for the grant, HMRC will contact you to tell you how much you will get and to get your payment details.
You will receive a lump sum, covering the 3 months directly into your bank account. We expect this to happen around June.
- I only started trading in 2018, am I still eligible? Yes, HMRC will use the years that you filed a self employed return
- I only stared trading in the tax year ended 5 April 2020, am I eligible? Unfortunately, if you were not self employed at 5 April 2019 then you are not eligible and will need to look at Universal Credit
- I am employed and self employed, am I eligible? If your self employed profits make up over 50% of your average total income for the 3 years, then yes
- I haven’t submitted my tax return to 5 April 2019, what should I do? You must submit your return in the next 4 weeks otherwise this will not be taken into account
- I claim tax credits, does this grant count as income? yes
- Will the grant be taxable? yes
What Can I Do NOW?
I understand that June is a long way off and that many of you will struggle until then, so what can you do until you receive the grant?
- Take a mortgage holiday / speak to your landlord to see if you can delay / reduce your rent payments
- Speak to your utility companies and ask for longer payment terms
- Speak to other creditors and ask for some leeway on payments
- Set up a Government Gateway account if you don’t already have one – so that you can view your account online https://www.gov.uk/log-in-register-hmrc-online-services
Find the latest news here https://www.gov.uk/guidance/claim-a-grant-through-the-coronavirus-covid-19-self-employment-income-support-scheme
DIRECTORS OF LIMITED COMPANIES
I’m afraid at the moment I don’t have any good news for directors of limited companies. I am still waiting for guidance on this but the guidelines at the moment mean that if you are a small company director, paying yourself the basic wage, then you are an officer of the company and not technically an employee.
You cannot furlough yourself as then who would run the company? What about planning for the future? What about keeping in touch with clients?
Currently the HMRC portal is not ready for claims to be made anyway and we are not expecting this until April, so hopefully things will change then. I would urge you to get on Twitter and explain your predicament to @RishiSunak .
In the meantime, if your household income has dropped sufficiently then you need to consider applying for Universal Credits.
Please DO NOT give your details to ANYBODY. Everybody is stressed and feeling the pressure at the moment, which is making you all vulnerable and this is a perfect storm for scammers. I have seen many already in the form of text messages, phone calls, emails and letters. They look very authentic.
Please only use the official government site to give your details out, and if you haven’t already done so please set up your Governement Gateway account here https://www.gov.uk/log-in-register-hmrc-online-services