On 26 March 2020 the Government has announced an unprecedented support to those who derive their main income through self-employment as part of their support measures required through the COVID-19 outbreak.
You can apply if you are self-employed i.e. working for yourself, on your own or you are a member of a partnership, and:
- You have submitted a self assessment tax return for the year ended 5 April 2019 (This should have been done by 31 January 2020);
- You have continued to trade in the year ended 5 April 2020;
- You are trading when you apply, or would be except for COVID-19;
- You intend to continue trading after 6 April 2020;
- You have lost trading or partnership trading profits due to COVID-19;
- Your self-employment trading profits average less than £50,000;
- Your average self-employment trading profits are more than half of your income.
The grant will be based on 80% of your taxable income averaged out over the three tax years ended 5 April 2019. There is a cap of £2,500 for 3 months. This income is taxable and will be paid into your bank account in one instalment. If you have been trading for less than this, the figures will be averaged over the period of trading.
How to apply
You cannot apply for this scheme yet. HMRC will contact you if you are eligible and they will invite you to apply online.
You will only be able to access this scheme through GOV.UK. If somebody calls, texts or e-mails claiming to be from HMRC, saying that you can claim financial help or are owed a tax refund they are lying. It will be a scam.
After you have made your application and you are deemed to be eligible for the grant, HMRC will contact you to confirm how much you will get and the payment details. If you get tax credits, you must include the grant in your claim as income.
OTHER AVAILABLE HELP
Employment Support Allowance
Self-employed people unable to work because they are directly affected by Covid-19 or selfisolating will be eligible for Contributory Employment and Support Allowance. This is now payable from the first day of sickness, rather than the eighth. Eligible claimants under 25 will be entitled to
£57.90 per week, and over 25s £73.10 per week. Getting through to the DWP is however proving to be incredibly stressful because of the level of demand.
All UK VAT registered businesses, including charities, can defer VAT payments due with their VAT returns between 20 March 2020 until 30 June 2020. No UK VAT registered business will have to make a VAT payment alongside their VAT return to HMRC in that period. Normal VAT payment due during this period are 7 April, 7 May or 7 June 2020 or the monthly payments due on each of these dates.
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.
The deferral is only for the VAT payment, businesses are supposed to file the VAT returns by normal due dates. Smaller companies with direct debits to pay VAT to HMRC will also need to cancel these immediately otherwise the money will be deducted automatically. The Treasury said it
could not cancel them unilaterally.
Income tax deferral
For Income Tax Self-Assessment, payments due on the 31st of July 2020 will be deferred until the 31st of January 2021.
This is an automatic offer with no applications required. No penalties or interest for late payment will be charged in the deferral period.
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.