Coronavirus Newletter
The Government have put
together a website
(https://www.businesssupport.gov.uk/coronavirus-business-support/) to
help businesses find out how to access the support, who is eligible,
when the schemes open and how to apply. I have summarised the
information below which may be relevant to your business.
I update my Twitter feed as and when I find new information. You can find me at @RichardBownCo.
Update 09/07/2020
It’s only open to those with trading profits up to £50,000, who make a majority of their income from self-employment. Only those already in self-employment, who have a tax return for 2019 can apply.
The chancellor has said, "there is nothing we can do" for newly self-employed who haven't completed a 2019 Tax Return.
Universal Credit & Self Employed Income Support
Here is an excerpt from Paul Lewis' (BBC's Moneybox program) blog in relation to claiming Universal Credit and the Self Employed Income Support.
If you do successfully claim Universal Credit it will give you an income until the payment is made. However, UC does not start for five weeks after you are awarded it. So you will have to claim an advance payment. Despite its name that is just a loan which will be repaid by deductions from your future Universal Credit. WARNING: If you already get tax credits it is probably best not to claim Universal Credit as it may well be worth less and you cannot then go back to tax credits. Seek advice - Citizens Advice is probably the best place to start.
When you get your self-employment payment that will affect your Universal Credit. The Government has now confirmed the June payment will be treated as earned income in that month. That will be taken into account when your next Universal Credit payment is made and will probably wipe it out. It will not affect earlier payments ones so you will not have to repay any Universal Credit you have had, except of course the advance payment if there is still an amount outstanding. The next month you will have to reclaim UC, which is easy and does not normally involve a five week wait. If your June payment was very big - well over £2500 - it may reduce the payments you get or even prevent a claim.
Time to Pay
All businesses and self-employed people in financial distress, and with outstanding tax liabilities, may be eligible to receive support with their tax affairs through HMRC’s Time To Pay service. These arrangements are agreed on a case-by-case basis and are tailored to individual circumstances and liabilities.
I update my Twitter feed as and when I find new information. You can find me at @RichardBownCo.
Update 09/07/2020
Applications for the first Self Employed Income Support Scheme (SEISS) grant are closing on 13 July 2020 (next Monday). This grant covers the period 1 March to 31 May 2020. The scheme is being extended and a second and final grant can be claimed from 17th August 2020 which relates to the period 1 June to 31 August 2020.
If you’re eligible, the second and final grant will be a taxable grant worth 70% of your average monthly trading profits, paid out in a single installment covering a further 3 months’ worth of profits, and capped at £6,570 in total.
The criteria to make a claim for the second grant is the same as the first grant. So if you couldn't claim before, you can't claim now either. You will have to confirm your business has been adversely affected on or after 14 July 2020.
You can make a claim for the First Grant via the Government Gateway using your Government Gateway user ID and password. If you do not have an existing Government Gateway user ID and password you should create them now.
Agents cannot make a claim through this scheme on behalf of their client. You will need to make the claim yourself. I am here to help, but if you need your UTR or NI numbers, please refer to the last tax return I sent you as the information is on here.
When you make your claim you’ll only need your:
Self Assessment UTR
National Insurance number
Government Gateway user ID and password
Bank account number and sort code you want us to pay the grant into (only provide bank account details where a Bacs payment can be accepted)
HMRC will check claims and take appropriate action to withhold or recover payments found to be dishonest or inaccurate.
The government will pay self-employed people, who have been adversely affected by the Covid-19, a taxable grant worth 80% of their average monthly profits over the last 3 years, up to £2,500 per month. You’ll be able to claim these grants and continue to do business.If you’re eligible, the second and final grant will be a taxable grant worth 70% of your average monthly trading profits, paid out in a single installment covering a further 3 months’ worth of profits, and capped at £6,570 in total.
The criteria to make a claim for the second grant is the same as the first grant. So if you couldn't claim before, you can't claim now either. You will have to confirm your business has been adversely affected on or after 14 July 2020.
You can make a claim for the First Grant via the Government Gateway using your Government Gateway user ID and password. If you do not have an existing Government Gateway user ID and password you should create them now.
Agents cannot make a claim through this scheme on behalf of their client. You will need to make the claim yourself. I am here to help, but if you need your UTR or NI numbers, please refer to the last tax return I sent you as the information is on here.
When you make your claim you’ll only need your:
Self Assessment UTR
National Insurance number
Government Gateway user ID and password
Bank account number and sort code you want us to pay the grant into (only provide bank account details where a Bacs payment can be accepted)
HMRC will check claims and take appropriate action to withhold or recover payments found to be dishonest or inaccurate.
It’s only open to those with trading profits up to £50,000, who make a majority of their income from self-employment. Only those already in self-employment, who have a tax return for 2019 can apply.
The chancellor has said, "there is nothing we can do" for newly self-employed who haven't completed a 2019 Tax Return.
Universal Credit & Self Employed Income Support
Here is an excerpt from Paul Lewis' (BBC's Moneybox program) blog in relation to claiming Universal Credit and the Self Employed Income Support.
If you do successfully claim Universal Credit it will give you an income until the payment is made. However, UC does not start for five weeks after you are awarded it. So you will have to claim an advance payment. Despite its name that is just a loan which will be repaid by deductions from your future Universal Credit. WARNING: If you already get tax credits it is probably best not to claim Universal Credit as it may well be worth less and you cannot then go back to tax credits. Seek advice - Citizens Advice is probably the best place to start.
When you get your self-employment payment that will affect your Universal Credit. The Government has now confirmed the June payment will be treated as earned income in that month. That will be taken into account when your next Universal Credit payment is made and will probably wipe it out. It will not affect earlier payments ones so you will not have to repay any Universal Credit you have had, except of course the advance payment if there is still an amount outstanding. The next month you will have to reclaim UC, which is easy and does not normally involve a five week wait. If your June payment was very big - well over £2500 - it may reduce the payments you get or even prevent a claim.
Time to Pay
All businesses and self-employed people in financial distress, and with outstanding tax liabilities, may be eligible to receive support with their tax affairs through HMRC’s Time To Pay service. These arrangements are agreed on a case-by-case basis and are tailored to individual circumstances and liabilities.
If you’ve missed, or
are worried about missing, your next tax payment due to Covid-19,
please contact HMRC. You can also call the HMRC helpline for advice
on 0800 0159 559.
Income Tax Deferral for the Self-Employed
If you are self-employed, Income Tax payments due in July 2020 under the Self-Assessment system will be deferred to January 2021.
VAT Deferral
VAT payments can be deferred for 3 months. The deferral will apply from 20 March 2020 until 30 June 2020.
This is an automatic offer with no applications required. UK Registered businesses will not need to make VAT payments normally due with VAT returns during this period. Taxpayers will be given until the end of the 2020-21 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.
Coronavirus Job Retention Scheme
Under the coronavirus Job Retention Scheme, all UK employers with a PAYE scheme can access support to continue paying part of their employees’ salary for those that would otherwise have been laid off during this crisis. This applies to employees who have been asked to stop working, but who are being kept on the payroll, otherwise described as ‘furloughed workers’. HMRC will reimburse 80% of their wages, up to £2,500 per month. This is to safeguard workers from being made redundant. The Coronavirus Job Retention Scheme will cover the cost of wages backdated to March 1st and has now been extended to 31st October 2020.
Designate affected employees as ‘furloughed workers,’ and notify your employees of this change – changing the status of employees remains subject to existing employment law and, depending on the employment contract, may be subject to negotiation.
Company Directors - Furlough
You can furlough yourself as an employee of your company and then the company can then claim a grant to cover 80% of the regular salary that you would have paid yourself via PAYE. Your company can pay the remaining 20% if it so wishes. Directors who have paid themselves partly in dividends from the company will not get 80% of dividends as they do not count as pay. They will just get 80% of their regular pay through PAYE.
If you do this, technically you can't then work for the business, but you can continue to perform your statutory obligations as director, eg, official legal filings.
Business Rates Holiday for Retail, Hospitality and Leisure
Businesses in the retail, hospitality and leisure sectors in England will not have to pay business rates for the 2020-21 tax year. Businesses that received the retail discount in the 2019-20 tax year will be rebilled by their local authority as soon as possible.
Cash Grant for Retail, Hospitality and Leisure
If your business is in the retail, hospitality or leisure sector, you will receive a cash grant of up to £25,000 per property. Businesses in these sectors with a rateable value of under £15,000 will receive a grant of £10,000. Businesses with a rateable value of between £15,001 and £51,000 will receive a grant of £25,000.
Small Business Grant Funding
There is support for small businesses that already pay little or no business rates because of small business rate relief (SBRR). This will provide a one-off grant of £10,000 to eligible businesses to help meet their ongoing business costs. You can now apply for this grant online at your local authority.
I can confirm that local councils have already starting paying out on this, so if you haven't already applied, do it now. I can also confirm that this grant is taxable, as "Grants which meet revenue expenditure, such as interest payable, are normally trading receipts."
North Tyneside
Newcastle Upon Tyne
Interest-Free Business Loans
If you’re facing cash flow issues, there are loans available for small or medium-sized businesses, with no interest to pay for 12 months.
https://www.british-business-bank.co.uk/ourpartners/coronavirus-business-interruption-loan-scheme-cbils/accredited-lenders/
IR35 Reforms
Reforms to IR35 have been delayed by 12 months as part of the government’s Covid19's economic response package.
https://www.gov.uk/government/news/off-payroll-working-rules-reforms-postponed-until-2021
If you’re self-employed or not eligible for SSP
If you are not eligible for SSP – for example if you are self-employed or earning below the Lower Earnings Limit of £118 per week – and you have Covid-19 or are advised to stay at home, you can now make a claim for Universal Credit or new style Employment and Support Allowance.
Income Tax Deferral for the Self-Employed
If you are self-employed, Income Tax payments due in July 2020 under the Self-Assessment system will be deferred to January 2021.
VAT Deferral
VAT payments can be deferred for 3 months. The deferral will apply from 20 March 2020 until 30 June 2020.
This is an automatic offer with no applications required. UK Registered businesses will not need to make VAT payments normally due with VAT returns during this period. Taxpayers will be given until the end of the 2020-21 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.
Coronavirus Job Retention Scheme
Under the coronavirus Job Retention Scheme, all UK employers with a PAYE scheme can access support to continue paying part of their employees’ salary for those that would otherwise have been laid off during this crisis. This applies to employees who have been asked to stop working, but who are being kept on the payroll, otherwise described as ‘furloughed workers’. HMRC will reimburse 80% of their wages, up to £2,500 per month. This is to safeguard workers from being made redundant. The Coronavirus Job Retention Scheme will cover the cost of wages backdated to March 1st and has now been extended to 31st October 2020.
Designate affected employees as ‘furloughed workers,’ and notify your employees of this change – changing the status of employees remains subject to existing employment law and, depending on the employment contract, may be subject to negotiation.
Company Directors - Furlough
You can furlough yourself as an employee of your company and then the company can then claim a grant to cover 80% of the regular salary that you would have paid yourself via PAYE. Your company can pay the remaining 20% if it so wishes. Directors who have paid themselves partly in dividends from the company will not get 80% of dividends as they do not count as pay. They will just get 80% of their regular pay through PAYE.
If you do this, technically you can't then work for the business, but you can continue to perform your statutory obligations as director, eg, official legal filings.
Business Rates Holiday for Retail, Hospitality and Leisure
Businesses in the retail, hospitality and leisure sectors in England will not have to pay business rates for the 2020-21 tax year. Businesses that received the retail discount in the 2019-20 tax year will be rebilled by their local authority as soon as possible.
Cash Grant for Retail, Hospitality and Leisure
If your business is in the retail, hospitality or leisure sector, you will receive a cash grant of up to £25,000 per property. Businesses in these sectors with a rateable value of under £15,000 will receive a grant of £10,000. Businesses with a rateable value of between £15,001 and £51,000 will receive a grant of £25,000.
Small Business Grant Funding
There is support for small businesses that already pay little or no business rates because of small business rate relief (SBRR). This will provide a one-off grant of £10,000 to eligible businesses to help meet their ongoing business costs. You can now apply for this grant online at your local authority.
I can confirm that local councils have already starting paying out on this, so if you haven't already applied, do it now. I can also confirm that this grant is taxable, as "Grants which meet revenue expenditure, such as interest payable, are normally trading receipts."
North Tyneside
Newcastle Upon Tyne
Interest-Free Business Loans
If you’re facing cash flow issues, there are loans available for small or medium-sized businesses, with no interest to pay for 12 months.
https://www.british-business-bank.co.uk/ourpartners/coronavirus-business-interruption-loan-scheme-cbils/accredited-lenders/
IR35 Reforms
Reforms to IR35 have been delayed by 12 months as part of the government’s Covid19's economic response package.
https://www.gov.uk/government/news/off-payroll-working-rules-reforms-postponed-until-2021
If you’re self-employed or not eligible for SSP
If you are not eligible for SSP – for example if you are self-employed or earning below the Lower Earnings Limit of £118 per week – and you have Covid-19 or are advised to stay at home, you can now make a claim for Universal Credit or new style Employment and Support Allowance.
If you are eligible for
new style Employment and Support Allowance, it will now be payable
from day 1 of sickness, rather than day 8, if you have Covid-19 or
are advised to stay at home.
Mortgage Holiday
The Government also announced that for those in difficulty due to Covid-19, mortgage lenders will offer at least a three month mortgage holiday. You will need to apply directly to your mortgage lender. Check with them first, if this will have an adverse effect on your credit rating.
Mortgage Holiday
The Government also announced that for those in difficulty due to Covid-19, mortgage lenders will offer at least a three month mortgage holiday. You will need to apply directly to your mortgage lender. Check with them first, if this will have an adverse effect on your credit rating.