Coronavirus - Further Update
Please be reassured we are doing our absolute upmost to help our clients through this unprecedented and difficult time, we are experiencing a high level of enquiries from our clients and are doing our best to reply to all as quickly as possible.
Click here for government updates on the guidance for employees, employers and businesses about the novel coronavirus, COVID-19.
Musicians / Artists – you may be entitled to emergency grants from PRS or Help Musicians. Check your eligibility
PRS Help Musicians
Coronavirus Update - Support for Self-Employed
If you operate via a Limited Company, you are not covered by the below rules.
On 26th March, the Chancellor, Rishi Sunak, has announced support to be given to self-employed workers.
Consistent with support to be given to employees, self-employed people will be entitled to a taxable grant of 80% of the average of their last 3 years profits up to a maximum of £2,500 per month.
The scheme will be in place, initially, for 3 months. This may be extended should it be required.
The taxable grant will be based on the last 3 years average profit from tax returns submitted and is available to those with profits under £50,000 per annum and those who make the majority of their income from self-employment.
To minimise fraud, only those who are already in self-employment who have a tax return for 2018/19 will be able to apply.
If you don’t have 3 years accounts, they will base this on the last 2 years, or purely 2018/19 net profit figures depending on what is available.
(Please bear in mind this is not optional, it is only if you haven’t yet been self-employed long enough to produce 3 years accounts.)
If you have not yet filed your 2018/19 tax return which was due by 31st January 2020, you have 4 weeks to submit the return to HMRC to enable you to be considered for this scheme.
Unfortunately, if you have become self-employed post 5th April 2019 and therefore not yet filed your first tax return you will not be eligible for this scheme. Instead, you should look at other support available, such as Business Interruption loans and Universal Credit.
HMRC will contact anyone who is eligible for the scheme and you will then be invited to submit your claim. You are advised not to contact HMRC at this time.
The scheme should be available no later than the beginning of June.
In the meantime, you may be entitled to the Business Interruption Loan which is interest free for 12 months and you are able to defer the 2nd payment on account for self-assessment usually due by 31st July 2020 to 31st January 2021.
Directors of Limited Companies
If you are a Director of a Limited company, you are classed as ‘employed’ and not ‘self employed’.
Therefore the government measures announced regarding self-employed workers on 26th March do not relate to you.
(Unless potentially you have a self-employment role that earns you more than your employment role)
At present, the only option that we are aware of is if Directors opt to ‘furlough’ themselves, via the Job Retention Scheme.
This would entitle them to 80% of their basic PAYE salary.
Most of our clients are on an ‘Annual Salary’ – therefore the Government will look at what the annual salary processed for 2019/20 was – apportion this evenly between the 12 months, and allow 80% of that to be covered.
For example – someone who had £9,000 annual salary a year processed;
£9,000 / 12 = £750 usual monthly salary
£750 x 80% = £600 – the government will pay if the employee/director is furloughed.
However, please note if you choose to go down this route, it would also mean Directors cannot do any work themselves, including not contacting suppliers or customers.
Anyone on furlough is not allowed to do any work whatsoever.
If however you feel you have no choice and cannot continue to work at present anyway, then this may be an option to you.
Aside from the above, and the VAT and tax deferrals announced, the only other option at present is the Business Interruption Loan Scheme, where you can apply for a loan to help tide you over.
The government have not yet addressed anything further for directors of small companies this far.
We hope, they will. A lot of people, not just our clients, but over the country, operate via this structure - and therefore we believe there already is and will continue to be clamour for this to be addressed.
Job Retention Scheme
Please click this link which provides further guidance as to how to furlough employees, and details of what you will need to make a claim;
• Whilst they have provided details of how to claim they have not yet said where to send it. We expect that information shortly.