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“SELF-EMPLOYED” BRIEFING FOR BUILDING LEGACIES CLIENTS – 27/03/2020

“SELF-EMPLOYED” BRIEFING FOR BUILDING LEGACIES CLIENTS – 27/03/2020

“SELF EMPLOYED” BRIEFING FOR BUILDING LEGACIES CLIENTS

The Chancellor of the Exchequer has announced a package of measures to help the Self-Employed and Freelancers who are not PAYE employees. Added together these groups make up around 5 million people in a total UK workforce of about 28 million.

The Chancellor says that his package will assist about 95% of the 5 million. This briefing gives details of the package and how people can access the support.

THE PACKAGE

Self-Employed Income Support Scheme

  • Self-Employed people will receive up to £2,500 per month in grants for at least 3 months.
  • Those eligible can receive a cash grant, which will be taxable, worth 80% of their average monthly trading profit (not revenue) over the last three years.
  • If individuals do not have three years of accounts that they have submitted to HMRC, two or even one year’s accounts will be accepted.
  • For those who were due to submit their accounts in January 2020 an extension of a further month (to 30 April 2020), late-penalty-free, will be allowed for them to make their submission.

Anyone who has not yet traded and filed accounts for a minimum of one year will not be eligible for this scheme.


Who Qualifies?

  • 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.
  • To minimise fraud, only those who are already in self-employment and meet the above conditions will be eligible to apply.
  • HMRC will identify eligible taxpayers and contact them directly with guidance on how to apply.
  • This scheme also applies to Members of Partnerships.
  • The income support scheme, which is being designed by HMRC from scratch, will cover the three months to May 2020.
  • 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 2020.

Those who pay themselves a salary and dividends through their own company are NOT covered by the scheme but will be covered for their salary by the Coronavirus Job Retention Scheme (not yet operational) if they are operating PAYE schemes.


How to Access the Scheme

  • All Self-Employed people who are eligible for the new scheme will be able to apply directly to HMRC for the taxable grant, using a simple online form, with the cash being paid directly into people’s bank account.
  • Apart from those submitting late returns you do not need to take any action at the moment.
  • Because the scheme will be administered by HMRC, they will contact each person individually and direct them to the relevant online form that will have to be completed and submitted electronically.
  • Individuals should not contact HMRC now.

HMRC will use existing information to check potential eligibility and invite applications once the scheme is operational.

URGENT PAYMENTS

  • For some people, waiting until June for a payment may cause great financial distress.
  • In such cases, the Chancellor has suggested that Self-Employed people will still be able to access other available Government support for those affected including revised and more generous Universal Credit and the Coronavirus business interruption loan scheme (CBILS).
  • Interest and fees on the loans will be paid by the Government for the first twelve months, making them interest free to customers.
  • Applying for Universal Credit has been simplified and can now be done online.

Although standard Universal Credit payments normally start five weeks after application approval, people are eligible to obtain an immediate cash advance as soon the initial application has been accepted.


ADDITIONAL INFORMATION

Further information and details of the Self-Employed scheme will be shared shortly by HMRC; as soon as we receive them, we will notify you in a further Bulletin.

We have previously shared a link showing which shops & businesses are permitted to continue to stay open and trade with members of the public. Please note that the Government has now added off-licences and other retail outlets that sell alcohol to the permitted list – view the updated list here.


STAY IN TOUCH AND GET HELP

As a Building Legacies client you can contact us for help and advice via email, social media and our website. You can also get in touch with your Business Growth Manager (BGM).

If you are not already on the Building Legacies programme, now is as good a time as ever to get the right support for your business to survive and thrive. Register with us to gain access to our FREE business support programme and receive our regular Covid-19 briefings plus other useful information directly into your inbox.

We will issue further advice and guidance Bulletins as the Covid-19 situation develops.

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