Covid-19 Pandemic – What Support for Businesses?

We’re all very worried about the current situation, and the effect that it has on both daily lives, and your business. It’s changing daily, and it’s hard to keep track. There are daily briefings from Government, (their website and update is here) and updates on both the Government website, and all major publications.

HMRC Support

ACAS Support

Companies House Support

Self Assessment Announcement 26-03-2020

Self Assessment Grant Eligibility 26/03/2020

Details change. Support measures are announced that won’t come into effect until the infrastructure has been built to accommodate them.

I’m constantly monitoring and updating, and will share information, and communicate that to you as soon as it’s known.

This document will be updated regularly.

Updated 06/04/2020

Self-Employed Grant

We now know a little more about how the Self-Employed Grant will work in practice. Here it is in a nutshell.

HMRC will pay a taxable grant to the self-employed (and partners), equivalent to 80% of their average trading profits for three months, capped at £2,500 per month.

How much will I receive?

The government will base the grant for each taxpayer on the average of their trading profits, as reported in their last three tax returns, with the final return being the 2018/19 submission.

The taxpayer (or agent) does not have to provide any figures at this stage, as HMRC will arrive at the average earnings figure using their own calculation. They are using a very simple (and obvious) calculation of totalling up the reported profit, and dividing by three for the average year. They will then calculate a quarter of this figure, and multiply it by 80%.

The grant may well be extended beyond three months if the Covid-19 shutdown extends beyond the three months initially announced.

The following taxpayers will not qualify:

  1. Anybody with average annual profits of more than £50,000 or more.
  2. Those who have not submitted a tax return for 2018-19.*
  3. Those who receive less than 50% of their taxable income from self employment.
  4. Anybody who has already ceased trading on a permanent basis.

* Note: An extension of the submission for 2018-19 tax year has been granted, giving those who have not submitted a further deadline of until 23rd April 2020 to submit. However, penalties for late filing will still apply.

Those who started trading on, or after 6th April 2019 will not be eligible to apply for the grant.

Property letting businesses are not regarded as trade, so landlords will not qualify for the SEISS grant, and the letting of furnished holiday accommodation is given the same treatment.

How will I receive the grant?

HMRC will contact all eligible taxpayers, and invite them to apply. The application will be an online process. It isn’t clear how the invitation will be received, but it certainly won’t be via text or email.

Please don’t be taken in by scammers who contact you, asking for further details. HMRC never email, text, or phone (imagine calling every single eligible taxpayer, asking if they’d like to apply? It’s not happening, is it?), so it’s more than likely that a letter will be the chosen means of communication, but watch this space.

When will I receive my grant?

The money will be available in early June, and paid into your bank account in one lump sum. This will have to be reported on the 2020-21 self assessment tax return, so do please keep your paperwork handy.

Anybody who is in receipt of WTC or UC will have to treat the grant as part of their self employed income for 2020-21.

Updated 27/03/2020

Directors will be able to claim assistance if they are furloughed, for the salaried aspect of their renumeration, under the condition that they are operating a PAYE Scheme. This may be claimed under the CJRS.