COVID-19 Update 26.3.2020– Self Employed

Self-employed Income Support Scheme (SEISS) 

Support for the self-employed has been announced which is broadly similar to the existing job protection scheme for the employed. It is available to the self-employed who have been negatively impacted by the virus. The award is based on the average monthly self-employed profits of the worker calculated by reference to their 5 April 2017, 2018 and 2019 tax returns for years in which they have traded.

You must have filed an 18/19 tax return as self-employed (or file it in the next 4 weeks), be trading in the tax year 19/20, be currently trading and intend to trade in the tax year 20/21. 

The payment will be 80% of the averaged monthly profit to a maximum of £2,500 per month payable for an initial three months in one lump sum during June. Tax payers earning in excess of £50,000 per annum will not qualify.

The self-employment must make up the majority of the taxable income for each individual (for example people running a small business from home alongside employment and those with substantial rental or investment income will not qualify).

HMRC will contact tax payers and invite them to apply once the scheme is operational. Payment will be directly into the claimants’ bank account. The grant is taxable and will be part of the income for the year so remember to include it in your accounts. (HMRC will know you have got it!)

Don’t forget you can also

 • Request a 3 month mortgage and loan deferral

 • No VAT payments from now until 30 June: 

  • CANCEL YOUR DD (Catch up by 5 April 2021)
  • July self-assessment tax bill deferred to 31 January 2021  
  • Grants for small businesses with small rates exception 
  • CBIL’s Loan scheme 
  • Commercial Leases – Talk to your Landlord if you cannot pay the rent, try to reach agreement for a holiday or deferral. The landlord cannot evict tenants who miss their payments in the next three months but the rent is still due.
  •  HMRC Time to pay tax helpline New number for COVID-19 related requests for delayed tax payments 0800 024 1222

What is still unclear is how directors will be treated ie will they be classed as employees for any salary through the PAYE system so furlough leave would apply. Employees who are Furloughed cannot do any work so will HRMC allow directors to furlough that portion? We don’t know yet.

The SEISS will not apply to small Limited Companies where there is sole Director who is paid via dividends or newly established self employed business who have not filled a tax return.

For further information, contact your accountant or myself at tel: 07841255480