This will help the Self-Employed to cover some of their money they have lost due to the Coronavirus (Covid-19).
Here is more information we have received today which we believe it will help the self-employed people:
Following the Chancellors announcement today this is a quick update on the bullet points of help for the self-employed as outlined below. The DailyManchester.co.uk team will upload more details as soon as they become available so please watch out for our updates.
A new self-employed Income Support Scheme is to be launched today. This will be available for self-employed people with average profits up to £50,000 or less for the past three years. It is also aimed at people whose income has mainly come from self-employment. To qualify, you must have submitted a tax return for 2018-2019 but there is a final four week window being allowed for people who were self-employed at that time but failed to submit their return before now.
The taxable grant will be 80% of the average monthly profit based on tax returns submitted over the past three years and this will be paid directly by the tax office to the individual. Payments are to be put in place initially for a three-month period, but this will be reviewed. It was announced that self-employed people can apply for the grant and still trade (if this is possible at this time). This is a surprising point and we do suggest that we all check on this as more details come out. It is expected that payments will be made by the beginning of June 2020 with the payments at this time back-dated for three-months. Those who qualify should receive a letter from the tax office asking them to fill in a simple online application. It is not surprising that this system is not in place now as this has only been announced moments ago.
Please remember that self-employed people operating from business rated premises should qualify for the business grant from their Council. Councils are preparing simple questionnaires for this now and will be sending these to your premises.
Self-employed people can also apply for Universal Credit at this time although we do know that there is now a significant backlog of applications. We have been advised that local authorities may be able to help people who are particularly struggling right now with possible deferment of payment of Council Tax, etc.
The business interruption loans can also be accessed by self-employed people through their own banks as long as you can show that you have a strong business which is being affected right now by the current situation.
We hope this information helps our website visitors and all the people in United Kingdom.
Thank you for supporting DailyManchester.co.uk by visiting our website daily.
Claim a grant through the Coronavirus (COVID-19) Self-employment Income Support Scheme
Use this scheme if you’re self-employed or a member of a partnership and have lost income due to Coronavirus.
This scheme will allow you to claim a taxable grant worth 80% of your trading profits up to a maximum of £2,500 per month for the next 3 months.
This may be extended if needed.
You can apply if you’re a self-employed individual or a member of a partnership and you:
• Have submitted your Income Tax Self Assessment tax return for the tax year 2018-19.
• Traded in the tax year 2019-20.
• Are trading when you apply, or would be except for COVID-19.
• Intend to continue to trade in the tax year 2020-21.
• Have lost trading/partnership trading profits due to COVID-19.
Your self-employed trading profits must also be less than £50,000 and more than half of your income come from self-employment. This is determined by at least one of the following conditions being true:
• Having trading profits/partnership trading profits in 2018-19 of less than £50,000 and these profits constitute more than half of your total taxable income.
• Having average trading profits in 2016-17, 2017-18, and 2018-19 of less than £50,000 and these profits constitute more than half of your average taxable income in the same period.
If you started trading between 2016-19, the tax office will only use those years for which you filed a Self-Assessment tax return.
If you have not submitted your Income Tax Self-Assessment tax return for the tax year 201819, you must do this by 23 April 2020.
HMRC will use data on 2018-19 returns already submitted to identify those eligible and will risk assess any late returns filed before the 23 April 2020 deadline in the usual way.
How much you’ll get
You’ll get a taxable grant which will be 80% of the average profits from the tax years (where applicable):
• 2016 to 2017
• 2017 to 2018
• 2018 to 2019
To work out the average HMRC will add together the total trading profit for the 3 tax years (where applicable) then divide by 3 (where applicable), and use this to calculate a monthly amount.
It will be up to a maximum of £2,500 per month for 3 months.
We’ll pay the grant directly into your bank account, in one instalment.
How to apply
You cannot apply for this scheme yet.
HMRC will contact you if you are eligible for the scheme and invite you to apply online.
Individuals do not need to contact HMRC now and doing so will only delay the urgent work being undertaken to introduce the scheme.
You will access this scheme only through www.gov.uk. If someone texts, calls or emails claiming to be from HMRC, saying that you can claim financial help or are owed a tax refund, and asks you to click on a link or to give information such as your name, credit card or bank details, it is a scam.
After you’ve applied
Once the tax office has received your claim and you are eligible for the grant, we will contact you to tell you how much you will get and the payment details.
If you claim tax credits you’ll need to include the grant in your claim as income.
Other help you can get
The government is also providing the following additional help for the self-employed:
Support for businesses through deferring VAT and Income Tax payments
Valued Added Tax (VAT) payments are being deferred for 3 months. The deferral will apply from 20 March 2020 until 30 June 2020. All UK businesses are eligible. This is an automatic offer with no applications required. Businesses will not need to make a VAT payment during this period. Taxpayers will be given until the end of the 2020 to 2021 tax year to pay any liabilities that have accumulated during the deferral period. VAT refunds and reclaims will be paid by the government as normal.
Customers who normally pay by direct debit should cancel their direct debit with their bank if they are unable to pay. Please do so in sufficient time so that HMRC do not attempt to automatically collect on receipt of your VAT return.
Income Tax payments due in July 2020 under the Self-Assessment system may be deferred until January 2021. You are eligible if you are due to pay your second self-assessment “payment on account” on 31 July. You do not need to be self-employed to be eligible for the deferment. The deferment is optional. If you are still able to pay your second payment on account on 31 July you should do so.
This is an automatic offer with no applications required. No penalties or interest for late payment will be charged if you defer payment until January 2021.
HMRC have also scaled up their Time to Pay offer to all firms and individuals who are in temporary financial distress as a result of COVID-19 and have outstanding tax liabilities.
Support for businesses that pay little or no business rates
The government will provide additional Small Business Grant Scheme funding for local authorities to support small businesses that already pay little or no business rates because of small business rate relief (SBRR), rural rate relief (RRR) and tapered relief. This will provide a one-off grant of £10,000 to eligible businesses to help meet their ongoing business costs.
You are eligible if:
• Your business is based in England.
• You are a small business and already receive SBRR and/or RRR.
• You are a business that occupies property.
You do not need to do anything. Your local authority will write to you if you are eligible for this grant.
Any enquiries on eligibility for, or provision of, the reliefs and grants should be directed to the relevant local authority.
Support for businesses through the Coronavirus Business Interruption Loan Scheme
The temporary Coronavirus Business Interruption Loan Scheme supports small businesses with access to loans, overdrafts, invoice finance and asset finance of up to £5 million and for up to 6 years.
The government will also make a Business Interruption Payment to cover the first 12 months of interest payments and any lender-levied fees, so smaller businesses will benefit from no upfront costs and lower initial repayments.
The government will provide lenders with a guarantee of 80% on each loan (subject to prelender cap on claims) to give lenders further confidence in continuing to provide finance to SMEs. The scheme will be delivered through commercial lenders, backed by the governmentowned British Business Bank.
There are 40 accredited lenders able to offer the scheme, including all the major banks.
You are eligible for the scheme if:
• Your business is UK based, with turnover of no more than £45 million per year.
• Have a borrowing proposal which, were it not for the COVID-19 pandemic, would be considered viable by the lender, and for which the lender believes the provision of finance will enable your business to trade out of any short-to-medium term difficulty.
How to access the scheme
The scheme is now open for applications. All major banks are offering this scheme.
To apply, you should talk to your bank or one of the 40 accredited finance providers (not the British Business Bank) as soon as possible, to discuss your business plan. You can find out the latest on the best ways to contact them via their websites. Please note that branches may currently be shut down to enable social distancing.
The full rules of the scheme and the list of accredited lenders are available on the British Business Bank website.
If you have an existing loan with monthly repayments you may want to ask for a repayment holiday to help with cash flow.
Claim for wage costs through the Coronavirus Job Retention Scheme
The Coronavirus Job Retention Scheme is a temporary scheme open to all UK employers for at least three months starting from 1 March 2020. We expect the scheme to be up and running by the end of April. It is designed to support employers whose operations have been severely affected by Coronavirus (COVID-19).
The tax office is building a portal to claim for 80% of furloughed employees’ (employees on a leave of absence) usual monthly wage costs, up to £2,500 a month, plus the associated Employer National Insurance contributions and minimum automatic enrolment employer pension contributions on that wage. Employers can use this scheme anytime during this period.
The scheme is open to all UK employers that had created and started a PAYE payroll scheme on 28 February 2020.
Any UK organisation with employees can apply, including:
• Recruitment agencies (agency workers paid through PAYE).
• Public authorities.
You must have created and started a PAYE payroll scheme on or before 28 February 2020 and have a UK bank account.
Furloughed employees must have been on your PAYE payroll on 28 February 2020, and can be on any type of contract, including:
• Full-time employees.
• Part-time employees.
• Employees on agency contracts.
• Employees on flexible or zero-hour contracts.
The scheme also covers employees who were made redundant since 28 February 2020, if they are rehired by their employer.
To be eligible for the subsidy, when on furlough, an employee can not undertake work for or on behalf of the organisation. This includes providing services or generating revenue. While on furlough, the employee’s wage will be subject to usual income tax and other deductions.
This scheme is only for employees on agency contracts who are not working. If you’re a director of your own company and paid through PAYE you may be able to get support using the Job Retention Scheme.
If an employee is working, but on reduced hours, or for reduced pay, they will not be eligible for this scheme and you will have to continue paying the employee through your payroll and pay their salary subject to the terms of the employment contract you agreed.
Employers should discuss with their staff and make any changes to the employment contract by agreement. When employers are making decisions in relation to the process, including deciding who to offer furlough to, equality and discrimination laws will apply in the usual way.
To be eligible for the subsidy employers should write to their employee confirming that they have been furloughed and keep a record of this communication.
Employees hired after 28 February 2020 cannot be furloughed or claimed for in accordance with this scheme.
You do not need to place all your employees on furlough. However, those employees who you do place on furlough cannot undertake work for you. Employees on unpaid leave cannot be furloughed, unless they were placed on unpaid leave after 28 February.
Employees on sick leave or self-isolating should get Statutory Sick Pay, but can be furloughed after this. Employees who are shielding in line with public health guidance can be placed on furlough.
If your employee has more than one employer they can be furloughed for each job. Each job is separate, and the cap applies to each employer individually.
A furloughed employee can take part in volunteer work or training, as long as it does not provide services to or generate revenue for, or on behalf of your business.
However, if workers are required to for example, complete online training courses whilst they are furloughed, then they must be paid at least the NLW/NMW for the time spent training, even if this is more than the 80% of their wage that will be subsidised.
Individuals who are on or plan to take Maternity Leave must take at least 2 weeks off work (4 weeks if they work in a factory or workshop) immediately following the birth of their baby. This is a health and safety requirement. In practice, most women start their Maternity Leave before they give birth.
If your employee is eligible for Statutory Maternity Pay (SMP) or Maternity Allowance, the normal rules apply, and they are entitled to claim up to 39 weeks of statutory pay or allowance.
Employees who qualify for SMP, will still be eligible for 90% of their average weekly earnings in the first 6 weeks, followed by 33 weeks of pay paid at 90% of their average weekly earnings or the statutory flat rate (whichever is lower). The statutory flat rate is currently £148.68 a week, rising to £151.20 a week from April 2020.
If you offer enhanced (earnings related) contractual pay to women on Maternity Leave, this is included as wage costs that you can claim through the scheme.
The same principles apply where your employee qualifies for contractual adoption, paternity or shared parental pay.
Work out what you can claim
Employers need to make a claim for wage costs through this scheme.
You will receive a grant from HMRC to cover the lower of 80% of an employee’s regular wage or £2,500 per month, plus the associated Employer National Insurance contributions and minimum automatic enrolment employer pension contributions on that subsidised wage. Fees, commission and bonuses should not be included.
At a minimum, employers must pay their employee the lower of 80% of their regular wage or £2,500 per month. An employer can also choose to top up an employee’s salary beyond this but is not obliged to under this scheme.
For full time and part time salaried employees, the employee’s actual salary before tax, as of 28 February should be used to calculate the 80%. Fees, commission and bonuses should not be included.
If the employee has been employed (or engaged by an employment business) for a full twelve months prior to the claim, you can claim for the higher of either:
• The same month’s earning from the previous year.
• Average monthly earnings from the 2019-20 tax year.
If the employee has been employed for less than a year, you can claim for an average of their monthly earnings since they started work.
If the employee only started in February 2020, use a pro-rata for their earnings so far to claim.
Once you’ve worked out how much of an employee’s salary you can claim for, you must then work out the amount of Employer National Insurance Contributions and minimum automatic enrolment employer pension contributions you are entitled to claim.
All employers remain liable for associated Employer National Insurance contributions and minimum automatic enrolment employer pension contributions on behalf of their furloughed employees.
You can claim a grant from HMRC to cover wages for a furloughed employee, equal to the lower of 80% of an employee’s regular salary or £2,500 per month, plus the associated Employer National Insurance contributions and minimum automatic enrolment employer pension contributions on paying those wages.
You can choose to provide top-up salary in addition to the grant. Employer National Insurance Contributions and automatic enrolment contribution on any additional top-up salary will not be funded through this scheme. Nor will any voluntary automatic enrolment contributions above the minimum mandatory employer contribution of 3% of income above the lower limit of qualifying earnings (which is £512 per month until 5th April and will be £520 per month from 6th April 2020 onwards).
National Living Wage/National Minimum Wage
Individuals are only entitled to the National Living Wage (NLW)/National Minimum Wage (NMW) for the hours they are working. Therefore, furloughed workers, who are not working, must be paid the lower of 80% of their salary, or £2,500 even if, based on their usual working hours, this would be below NLW/NMW.
What you’ll need to make a claim
Employers should discuss with their staff and make any changes to the employment contract by agreement. To claim, you will need:
• Your PAYE reference number.
• The number of employees being furloughed.
• The claim period (start and end date).
• Amount claimed (per the minimum length of furloughing of 3 weeks).
• Your bank account number and sort code.
• Your contact name.
• Your phone number.
You will need to calculate the amount you are claiming. HMRC will retain the right to retrospectively audit all aspects of your claim.
You can only submit one claim at least every 3 weeks, which is the minimum length an employee can be furloughed for. Claims can be backdated until the 1 March if applicable.
Once HMRC have received your claim and you are eligible for the grant, they will pay it via BACS payment to a UK bank account.
You should make your claim in accordance with actual payroll amounts at the point at which you run your payroll or in advance of an imminent payroll.
You must pay the employee all the grant you receive for their gross pay, no fees can be charged from the money that is granted. You can choose to top up the employee’s salary, but you do not have to.
When the government ends the scheme, you must make a decision, depending on your circumstances, as to whether employees can return to their duties. If not, it may be necessary to consider termination of employment (redundancy).
Employees that have been furloughed have the same rights as they did previously. That includes Statutory Sick Pay entitlement, maternity rights, other parental rights, rights against unfair dismissal and to redundancy payments.
Once the scheme has been closed by the government, HMRC will continue to process remaining claims before terminating the scheme.
Wages of furloughed employees will be subject to Income Tax and National Insurance as usual. Employees will also pay automatic enrolment contributions on qualifying earnings, unless they have chosen to opt-out or to cease saving into a workplace pension scheme.
Employers will be liable to pay Employer National Insurance contributions on wages paid, as well as automatic enrolment contributions on qualifying earnings unless an employee has opted out or has ceased saving into a workplace pension scheme.
Payments received by a business under the scheme are made to offset these deductible revenue costs. They must therefore be included as income in the business’s calculation of its taxable profits for Income Tax and Corporation Tax purposes, in accordance with normal principles.
Businesses can deduct employment costs as normal when calculating taxable profits for Income Tax and Corporation Tax purposes.
Support for businesses who are paying sick pay to employees
The government will bring forward legislation to allow small-and medium-sized businesses and employers to reclaim Statutory Sick Pay (SSP) paid for sickness absence due to COVID19.
The eligibility criteria for the scheme will be as follows:
• This refund will cover up to 2 weeks’ SSP per eligible employee who has been off work because of COVID-19.
• Employers with fewer than 250 employees will be eligible – the size of an employer will be determined by the number of people they employed as of 28 February 2020.
• Employers will be able to reclaim expenditure for any employee who has claimed SSP (according to the new eligibility criteria) as a result of COVID-19.
• Employers should maintain records of staff absences and payments of SSP, but employees will not need to provide a GP fit note. If evidence is required by an employer, those with symptoms of Coronavirus can get an isolation note from NHS111 online and those who live with someone that has symptoms can get a note from the NHS website.
• Eligible period for the scheme will commence the day after the regulations on the extension of SSP to those staying at home comes into force.
• The government will work with employers over the coming months to set up the repayment mechanism for employers as soon as possible.
You are eligible for the scheme if:
• Your business is UK based.
• Your business is a small or medium-sized and employs fewer than 250 employees as of 28 February 2020.
A rebate scheme is being developed. Further details will be provided in due course once the legalisation has passed.
Support for retail, hospitality and leisure businesses that pay business rates.
Business rates holiday for retail, hospitality and leisure businesses.
The government will introduce a business rates holiday for retail, hospitality and leisure businesses in England for the 2020 to 2021 tax year. Businesses that received the retail discount in the 2019 to 2020 tax year will be rebilled by their local authority as soon as possible.
You are eligible for the business rates holiday if:
• Your business is based in England.
• Your business is in the retail, hospitality and/or leisure sector.
Properties that will benefit from the relief will be occupied hereditaments that are wholly or mainly being used:
• As shops, restaurants, cafes, drinking establishments, cinemas and live music venues.
• For assembly and leisure.
• As hotels, guest & boarding premises and self-catering accommodation.
You do not need to take any action. This will apply to your next council tax bill in April 2020. However, local authorities may have to reissue your bill automatically to exclude the business rate charge. They will do this as soon as possible.
Support for nursery businesses that pay business rates
The government will introduce a business rates holiday for nurseries in England for the 2020 to 2021 tax year.
You are eligible for the business rates holiday if your business is based in England.
Properties that will benefit from the relief will be
• Occupied by providers on Ofsted’s Early Years Register.
• Wholly or mainly used for the provision of the Early Years Foundation Stage.
How to access the scheme
You do not need to take any action. This will apply to your next council tax bill in April 2020. However, local authorities may have to reissue your bill to exclude the business rate charge. They will do this as soon as possible.
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