26/03/2020 by Pete Bird 0 Comments
Bird & Co - COVID-19 Update
Self-Employed Income Support Scheme Announced
We at Bird & Co hope that you are keeping safe. We am sure that you may have heard are already being inundated with calls from clients regarding the just announced 'Self-Employed Income Support Scheme'. Below is a quick summary which may help you navigate the announcement, but please note things are change quickly though.
You don't need to do anything right now
Those eligible for the scheme will be contacted by HMRC and invited to complete a simple form to make use of the scheme. At this moment, there is little information on what this form will look like (other than it will be online) and no clear mechanism to appeal a decision of HMRC to determine a taxpayer ineligible.
The scheme will provide grants to the self-employed
Self-employed individuals will receive a taxable cash grant worth 80% of their average monthly trading profits, as reported through self-assessment, over the last three years. The Government claims this will cover 95% of people who primarily receive their income through self-employment. As with the Coronavirus Job Retention Scheme, the payments will be capped at £2,500 per month.
Not all self-employed people will be eligible
The Scheme will only be open to those who reported trading profits of less than £50,000 in 2018-19 or an average trading profit of less than £50,000 from the last three years (2016-17, 2017-18 and 2018-19). Additionally, the Scheme is only open to those who earned more than half their income from self-employment. Those who have not traded for the last three years will not be eligible for the Scheme.
The grants won’t be available until June
Grants made under the scheme will be paid in one lump sum in June. Eligible individuals can continue to trade and do not need to stop work to receive the grant. Those unable to trade and are struggling financially are advised to apply for Universal Credit, and to approach their mortgage provider for a three-month mortgage holiday.
What about those operating from companies?
Those who operate through a limited company are not eligible for the scheme. Though it has been confirmed that such individuals are eligible for the Coronavirus Job Retention Scheme if they operate a PAYE scheme.
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This is only a brief guideline and not responsibility is not accepted by the writer or Bird & Co.