COVID-19 UPDATE – 26/03/20 

COVID-19 is having catastrophic affects all over the world. Our priority is to ensure that we stay fit and healthy, whilst also fighting through the financial battle of having little or no income.  This also includes Accountants, especially those in the Entertainment World.

 

Today is the day that all  self-employed / freelance workers have been eagerly waiting for, to see  what Rishi  Sunak has to offer.  Last Friday he made a huge announcement for those on PAYE, but… what about you… ?

 

We are  constantly  trying to assist a significant number of clients and non-clients with support and advice where possible.  Our emails, social media and calls are currently going crazy, but we are replying as fast as we can.

 

So, what did Rishi Sunak announce today? The SELF-EMPLOYED INCOME SUPPORT SCHEME.

 

Eligibility:

 

  • You must have submitted your 2018/2019 Tax Return to HMRC.  If you haven’t done this yet, you have 4 weeks from today (26 March) to submit this. Get in touch if you need help.

 

  • HMRC will average your trading profit over 3 years if they are available. If not, they will average it over 2 years if available, if not over 1 year.

 

  • Over 50% of your income in 2016/2017, 2017/2018 and 2018/2019 must be from self-employment.

 

  • Your trading profit must be less than £50,000 in 2018/2019 or less than £50,000 on average for 2016/2017, 2017/2018 and 2018/2019.

 

Entitlement:

 

  • You will receive 80% of your average trading profits, up to £2,500 per month for 3 months.

 

  • The grant will be paid in a single lump sum. The grant will be to cover the 3 months 1 March 2020 to 31 May 2020.

 

  • The grants will start to be paid at the beginning of June.

 

  • The grant is not repayable, but it is taxable income that will be included on your tax return.

 

How to apply:

 

  • HMRC will contact you with details how to apply – there is nothing for you to do yet.

 

While you wait:

 

  • Call the Universal Credit Helpline on 0800 328 5644 to apply. You can still apply for this whilst waiting for the Self-Employed Income Support Scheme to be implemented. You may be able to also request an advance payment of Universal Credit.

 

  • You could apply for an interest free loan while you wait for your grant. You can contact your bank directly for this either online or by phone.

 

  • We have seen lots of you moving to temporary PAYE jobs – this is okay to continue and should not affect your eligibility.

 

Your questions:

 

We have received hundreds of questions in the last few hours and we have tried to answer as many as possible.  Unfortunately, until the full technical details are released, we can not answer all questions 100% accurately.

 

Q: Will HMRC take my 2019/2020 figures into account?

 

A: It appears not. However, we would recommend that you still submit your 2020 Tax Return as soon as possible. You can then (a) receive any refund you may be due (overpaid tax on PAYE or overpaid Payments on Account) or (b) get your Tax Return out of the way for later in the year when life is back to normal.

 

Q: I was self-employed in 2018/2019, however 90% of my income in 2019/2020 is PAYE, will I still qualify?

 

A: This is one we are not sure of yet. From what they have stated so far, you should not qualify as the majority of your income is now PAYE. However, we ae not sure how HMRC will account for this at the moment.  If you are still paid via PAYE, you should be able to get support through the Job Retention Scheme.

 

Q: How does it work if I have been working on cruise ships previously?

 

A: We are not 100% sure on this one, however if you qualified for Seafarer’s Relief, you will have been classed as an employee, not self-employed. Therefore, it is unlikely that you can claim.

 

Q: 2018/2019 was my first year, do I qualify?

 

A: Yes. As long as you meet the other criteria, detailed above.

 

Q: What is trading profit?

 

A: Profit is the figure after all your expenses have been deducted.  Income – expenses = profit.

 

Q: My partner is still working; will I be eligible? 

 

A: Yes. As long as you meet the other criteria, detailed above.

 

Q: I am a sole director and shareholder of a limited company; I pay myself a small salary and dividends, what am I eligible for? Help!

 

A: There is currently good and (mainly) bad news for company directors. Good news – You can claim 80% of your salary back through the Job Retention Scheme, if you are not doing any work for the company at all. This would not work out to a huge sum, approximately £1,750 in total for the 3 months. Bad news – we do not believe that you can use any dividend income to claim anything further.

 

Therefore, the only other options are Universal Credit and/or a business or personal interest free loan.  You may be eligible for one of the other grants, if you have a business property, not your private house.

 

Q: If I claim Universal Credit now, will I have to repay it when I receive the grant?

 

A: We are not 100% sure, however it is very unlikely that the Universal Credit will be repayable. The best thing to do, is to call them and ask. The current wait times are very long, however, you will eventually get through and they will be able to answer your questions.

 

 

If you have any questions or if you would like assistance with your Tax Return (especially if you have a late 2018/2019 tax return) please contact us on info@theataccounts.co.uk and we will come back to you as quickly as possible.

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