On 26 March, the chancellor followed up his package of support for employed workers with the coronavirus self-employment income support scheme. The scheme will allow self-employed individuals or partnership members with trading profits under £50,000 to claim a taxable grant worth 80% of their trading profit, up to a maximum of £2,500 per month for at least three months and possibly longer.
To be eligible, claimants must:
have submitted a self-assessment tax return for the tax year 2018/19; and
have traded in the tax year 2019/20.
be trading when they apply (or would be except for Covid-19);
intend to continue to trade in 2020/21;
have lost trading or partnership trading profits due to Covid-19.
Potential claimants have until 23 April to submit their 2018/19 self-assessment return if they have not already done so.
More than half of an eligible claimant’s income must come from self-employment and must meet at least one of the following conditions:
trading profits in 2018/19 of less than £50,000, which constitute more than half of total taxable income;
average trading profits in 2016/17, 2017/18, and 2018/19 of less than £50,000, which constitute more than half of average taxable income in the same period.
The scheme is not yet open for applications. HMRC will identify eligible taxpayers and contact them directly with guidance on how to apply. Grants will be paid in one single instalment, to cover at least a three-month period. The first payments are expected to be made in June.
The self-employment scheme will not cover those who pay themselves a salary and dividends through their own company. HMRC’s guidance indicates that individuals who are directors of their own companies and who are themselves paid via PAYE should be eligible for the coronavirus job retention scheme (JRS) on the same terms as other businesses and their employees. However, the ATT is concerned that this group will only be able to claim for the relatively small salary element of their overall remuneration. The ATT president, Jeremy Coker, urged the government to ‘find ways to help those in self-employment and owners of small companies who will otherwise not qualify for appropriate and much needed support’.
The chair of the work and pensions committee, Stephen Timms, welcomed the scheme but expressed concern that eligible claimants would have to wait until June before receiving payment. In the meantime, Mr Timms called upon the government to speed up payments to universal credit claimants, with advance payments made non-repayable.
Self-employed individuals who also receive tax credits will need to include these grants as income in their tax credits claims.
The government has issued further guidance on the coronavirus job retention scheme (JRS) since the original announcement on 20 March. The grant available under the scheme will, in addition to salary, cover employer NICs and minimum automatic enrolment employer pension contributions, for which employers remain liable while the scheme continues.
The scheme requires employers, as a minimum, to pay ‘furloughed’ employees the lower of 80% of their regular wage or £2,500 per month. Employers are not obliged under the scheme to top up pay beyond this level.
HMRC has also revised its guidance on deferring income tax payments, confirming that the deferral until 31 January 2021 of self-assessment payments-on-account due on 31 July 2020 is open to all taxpayers, not only the self-employed.
HMRC has issued more guidance on deferral of VAT payments due between 20 March 2020 and 30 June 2020 until 31 March 2021. This includes confirmation that VAT MOSS payments are not covered, VAT returns must still be submitted on time, and VAT reclaims and refunds will be processed as normal during the deferral period.
HMRC’s telephone helpline number for businesses and self-employed people concerned about not being able to pay their tax due to coronavirus has changed to 0800 024 1222.
On 26 March, the chancellor followed up his package of support for employed workers with the coronavirus self-employment income support scheme. The scheme will allow self-employed individuals or partnership members with trading profits under £50,000 to claim a taxable grant worth 80% of their trading profit, up to a maximum of £2,500 per month for at least three months and possibly longer.
To be eligible, claimants must:
have submitted a self-assessment tax return for the tax year 2018/19; and
have traded in the tax year 2019/20.
be trading when they apply (or would be except for Covid-19);
intend to continue to trade in 2020/21;
have lost trading or partnership trading profits due to Covid-19.
Potential claimants have until 23 April to submit their 2018/19 self-assessment return if they have not already done so.
More than half of an eligible claimant’s income must come from self-employment and must meet at least one of the following conditions:
trading profits in 2018/19 of less than £50,000, which constitute more than half of total taxable income;
average trading profits in 2016/17, 2017/18, and 2018/19 of less than £50,000, which constitute more than half of average taxable income in the same period.
The scheme is not yet open for applications. HMRC will identify eligible taxpayers and contact them directly with guidance on how to apply. Grants will be paid in one single instalment, to cover at least a three-month period. The first payments are expected to be made in June.
The self-employment scheme will not cover those who pay themselves a salary and dividends through their own company. HMRC’s guidance indicates that individuals who are directors of their own companies and who are themselves paid via PAYE should be eligible for the coronavirus job retention scheme (JRS) on the same terms as other businesses and their employees. However, the ATT is concerned that this group will only be able to claim for the relatively small salary element of their overall remuneration. The ATT president, Jeremy Coker, urged the government to ‘find ways to help those in self-employment and owners of small companies who will otherwise not qualify for appropriate and much needed support’.
The chair of the work and pensions committee, Stephen Timms, welcomed the scheme but expressed concern that eligible claimants would have to wait until June before receiving payment. In the meantime, Mr Timms called upon the government to speed up payments to universal credit claimants, with advance payments made non-repayable.
Self-employed individuals who also receive tax credits will need to include these grants as income in their tax credits claims.
The government has issued further guidance on the coronavirus job retention scheme (JRS) since the original announcement on 20 March. The grant available under the scheme will, in addition to salary, cover employer NICs and minimum automatic enrolment employer pension contributions, for which employers remain liable while the scheme continues.
The scheme requires employers, as a minimum, to pay ‘furloughed’ employees the lower of 80% of their regular wage or £2,500 per month. Employers are not obliged under the scheme to top up pay beyond this level.
HMRC has also revised its guidance on deferring income tax payments, confirming that the deferral until 31 January 2021 of self-assessment payments-on-account due on 31 July 2020 is open to all taxpayers, not only the self-employed.
HMRC has issued more guidance on deferral of VAT payments due between 20 March 2020 and 30 June 2020 until 31 March 2021. This includes confirmation that VAT MOSS payments are not covered, VAT returns must still be submitted on time, and VAT reclaims and refunds will be processed as normal during the deferral period.
HMRC’s telephone helpline number for businesses and self-employed people concerned about not being able to pay their tax due to coronavirus has changed to 0800 024 1222.
