Business Tax
Help for Self Employed
There will be more questions than answers and we’ll do our best to keep abreast of them to be up to speed on what is available and how to claim.
Welfare benefits of up to £1,800 per month. 80% of average earnings as declared over the last 3 years – up to £2,500 per month. Open to businesses with business profits up to £50K.
This scheme looks like it is to be adminstered by HMRC and will be up and running by the beginning of June – hopefully!
Furloughed workers
If your employer cannot cover staff costs due to COVID-19, they may be able to access support to continue paying part of your wage, to avoid redundancies.
If your employer intends to access the Coronavirus Job Retention Scheme, they will discuss with you becoming classified as a furloughed worker. This would mean that you are kept on your employer’s payroll, rather than being laid off.
To qualify for this scheme, you should not undertake work for them while you are furloughed. This will allow your employer to claim a grant of up to 80% of your wage for all employment costs, up to a cap of £2,500 per month.
You will remain employed while furloughed. Your employer could choose to fund the differences between this payment and your salary, but does not have to.
If your salary is reduced as a result of these changes, you may be eligible for support through the welfare system, including Universal Credit.
We intend for the Coronavirus Job Retention Scheme to run for at least 3 months from 1 March 2020, but will extend if necessary.
https://www.gov.uk/government/publications/guidance-to-employers-and-businesses-about-covid-19/covid-19-guidance-for-employees
End of Tax Year Considerations
With a month to go before the end of the 2019/20 tax year, just some reminders for provisions to consider before the 5th April.
ISA allowance. If you haven’t used up your £20k this year, now is the time to think about moving funds into your ISA. You can put it straight into a cash ISA and then transfer it to another type after the year end without losing out or using up any of next year’s allowance.
Pension contributions. The annual tax free allowance is £40k. Particularly if you are a limited company there are significant tax savings to be made by making company contributions into your personal pension. To benefit you must make the payment as you can not make a tax-deductible provision in the accounts. There is a corporation tax saving of up to £7,600 per person to be made for 2019/20
It’s budget day next Wednesday. We’ll be listening and will communicate any adjustments to be made this tax year although we are not expecting any surprises. Then we can turn our attention to 2020/21.
Employers Allowance Changes
More Great communication from HMRC resulting in panic.
From 6th April this year there are changes to the eligibility for claiming the Employers Allowance. This is worth up to £3,000 and is design to encourage employment. Will you be affected by the changes? Chances are, if you qualify now, probably not.
If you employ people over the primary NI threshold (currently £166pw), or have two directors both being paid above the primary threshold, you currently qualify for the allowance. This is not changing.
If your secondary NI liability for the previous tax year exceeds £100,000 or you receive other State Aid that take you over a defined de minis state aid limit based on your industry sector, then you will lose your EA or have it restricted. For these businesses, the EA does not make a lot of difference or provide the same incentives for which it was intended.
No need to panic!
https://www.gov.uk/guidance/changes-to-employment-allowance
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Self-employment Income Support Scheme
Posted on
Below are extracts from HMRC’s website. Please be particularly aware of the warnings regarding scams. HMRC never contact you directly by phone or email.
https://www.gov.uk/guidance/claim-a-grant-through-the-coronavirus-covid-19-self-employment-income-support-scheme
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.
Who can apply
You can apply if you’re a self-employed individual or a member of a partnership and you:
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:
If you started trading between 2016-19, HMRC will only use those years for which you filed a Self-Assessment tax return.
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):
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.
After you’ve applied
Once HMRC 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:
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.
This entry was posted in Business Tax, News and Comments, Personal Taxes, Uncategorized and tagged Self-employment Income Support Scheme.