Chancellor of the Exchequer Rishi Sunak has implemented a number of emergency measures to support those losing income due to the Covid-19 pandemic. 

The measures detailed below are based on current HM Revenue and Customs guidance (as at 26th March 2020):

Self-Employment Income Support Scheme (SEISS)

This scheme will allow a self-employed individual (or member of a partnership) to claim a taxable grant worth 80% of their trading profits up to a maximum of £2,500 per month for the next three months (this may be extended if required).

The eligibility criteria for the SEISS are that you must meet all of the following:

  • Be self-employed or a member of partnership;
  • Have lost trading/partnership trading profits due to COVID-19;
  • File a tax return for 2018-19 as self-employed or a member of a trading partnership. Those who have not yet filed   for 2018-19 will have an additional four weeks from this announcement to do so;
  • Have traded in 2019-20; be currently trading at the point of application (or would be except for COVID 19) and intend to continue to trade in the tax year 2020 to 2021
  • Have trading profits of less than £50,000 and more than half of your total income comes from self-employment. This can be with reference to at least one of the following conditions:
  • Your trading profits and total income in 2018/19
  • Your average trading profits and total income across up to the three years between 2016-17, 2017-18, and 2018-19.

https://www.gov.uk/guidance/claim-a-grant-through-the-coronavirus-covid-19-self-employment-income-support-scheme

Income Tax – July 2020 Payments on Account

Payments on Account which are due by 31st July 2020 can be deferred to 31st January 2021. 

Any individuals that are due to make a payment in July are eligible for the deferment (you do not need to be self-employed).

The deferment will apply automatically; no penalties or interest will be charged if deferment is made.

 https://www.gov.uk/understand-self-assessment-bill/payments-on-account

Job Retention Scheme 

The Coronavirus Job retention scheme enables all UK employers to apply for a grant of up to 80% of their furloughed employee’s costs, up to a cap of £2,500 per month. It’s expected to run for at least three months from 1 March 2020 (the government may extend if necessary).

To qualify for this support you’ll need to:

  • Designate affected employees as ‘furloughed workers,’ and notify your employees of this change. Individuals that are  designated as furloughed should not carry out any work for the company.
  • Information needs to be submitted to HMRC about the employees that have been furloughed and their earnings through a new online portal (currently being set-up by HMRC)

 https://www.gov.uk/guidance/claim-for-wage-costs-through-the-coronavirus-job-retention-scheme

Contractors that have a company structure in place meet the criteria. However, HMRC’s guidance only allows a grant in relation to PAYE earnings.  Therefore, company owners that pay dividends and keep salary to a minimum will only benefit to the extent of the salary paid. 

Other Government Measures

HMRC Time to Pay Scheme

If an individual of a company is unable to pay a tax liability due to the Coronavirus you can call HMRC’s dedicated helpline on 0800 0159 559 to discuss payment options

 https://www.gov.uk/government/publications/guidance-to-employers-and-businesses-about-covid-19/covid-19-support-for-businesses#support-for-businesses-paying-tax-time-to-pay-service

 Coronavirus Business Interruption Loan Scheme 

This scheme will provide for smaller businesses across the UK who are experiencing lost or deferred revenues, leading to disruptions to their cash flow.

 https://www.gov.uk/government/publications/guidance-to-employers-and-businesses-about-covid-19/covid-19-support-for-businesses#support-for-businesses-through-the-coronavirus-business-interruption-loan-scheme

Value Added Tax - Quarterly Payments

VAT payments for the next quarter will be deferred, so no business will pay any VAT for the next three months.

There are additional measures which have been brought in and a summary all of the measures in place can be found here:

https://www.gov.uk/government/publications/guidance-to-employers-and-businesses-about-covid-19/covid-19-support-for-businesses

 

If you require assistance on any of the topics covered here please get in touch with Kenny MacDonald on 0131 659 8772 (or by email at kenny.macdonald@turcanconnell.com) or your usual Turcan Connell contact. Alternatively, you can visit: /contact-us/