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COVID-19: Guidance for the Self-Employed

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SEISS

On 30th November you will be able to claim a grant for up to 80% of your profits, to cover you for Nov – Jan 2021. This is capped at £7500. They also declared there will be one more grant which will cover the period Feb – Apr 2021. Details are yet unknown of when this will be paid or for how much.

To receive these grants, you need to have received the previous grants.

Mortgage Holiday

Mortgage Payment Holidays have been augmented to accommodate the new lockdown.

  • Borrowers who have been impacted by coronavirus and have not yet had a mortgage payment holiday will be entitled to a six month holiday
  • Those that have already started a mortgage payment holiday will be able to top up to six months without this being recorded on their credit file.

 

 

Two Further Grants for Self-Employed

When the chancellor announced the Job Support Scheme (JSS) he also revealed two further grants (for the period November ’20 to April ’21) that freelancers or the self-employed could apply for.  While they must have been eligible for the original SEISS to apply now, they need not have actually applied for them.

 

  • The first extended grant will cover the three month period from November ’20 to January ’21, will be calculated on 40% of average monthly trading profits and will be capped at £3,750 for the three month period.  This is much higher than the original cap that was suggested of £1,875 and which was revised after criticism.
  • The second extended grant will cover the tree months from February ’21 to April ’21, although there are not details yet of the amounts involved.

 

 

The Original Self-Employed Income Support Scheme

  • Self-employed will now be able to receive a taxable grant worth up to 80% of your average monthly profits, up to a maximum of £2,500 per month. 
  • This is equivalent to the amount received by furloughed employees on the Jobs Retention Scheme.
  • Applications will open in August for a second and final grant.  This will be covering three months worth of average trading profits.  But it will be at 70% this round, up to a total of £6,570 and will be paid in a single installment.

Though those who pay themselves a salary and dividends through their own company are not covered by the scheme, they will be covered for their salary by the Coronavirus Job Retention Scheme if they are operating PAYE schemes.

If you are a freelancer or self-employed it’s important to be aware that agents cannot claim on your behalf. You will need your government gateway ID and password. 

 

Government Gateway ID & Password  

If you don’t have this, register now. Go to:

https://www.access.service.gov.uk/login/signin/creds

and select Create Sign in Details (below the password box).

You will also need to be registered to manage your self-assessment account online. Please check that you have access to this and, if not, add this service to your account. You might be sent a code, which can take about a week to arrive.


Who is eligible for SEISS?

  • Only open to anyone with trading profits up to £50,000 per annum (no support for those earning more than £50,000)
  • You must make the majority of income from being self employed and you must still be trading            
  • Only open to those already registered as self-employed and who have a tax return for 2019 (i.e. you are not eligible if you became self-employed after April 2019)
  • If you are late filing your tax return for 2018/2019, you must do so in the next 4 weeks in order to qualify.
  • Average profits are calculated from your last 3 tax returns (or whatever is available)

These grants will cover 3 months of income (March-May) and the government may extend this if necessary.

They will be paid no later than June, and like the other grants, you do not have to do anything. If you are eligible, HMRC will contact you.  You will be required to complete a simple form and the grant will be paid directly into your bank account.

The chancellor also reminded self-employed, that they can access CBILS and Universal Credit.

However, his parting line was that if we all want to access the support equally, we must all pay in equally. This implies that tax reforms will follow that may remove the tax advantage of being self-employed.

What Else is Available?

  • Self Assessment payments due in July will be deferred until Jan 2021
  • Universal Credit: the minimum income floor will be suspended for everyone affected by coronavirus.  This means self-employed people will be able to access Universal Credit. equivalent to statutory sick pay
  • Universal Credit standard allowance will be increased by £1,000 for the next 12 months as will Working Tax Credit

Mortgage Holiday

Mortgage Payment Holidays have been augmented to accommodate the new lockdown.

  • Borrowers who have been impacted by coronavirus and have not yet had a mortgage payment holiday will be entitled to a six month holiday
  • Those that have already started a mortgage payment holiday will be able to top up to six months without this being recorded on their credit file.

Extended Credit, Loan Breaks

Many banks are emergency credit card increases, larger cash withdrawals etc to help customers make it through the coronavirus scare. Check with your bank to see what they can offer

Bills, Utilities & Council Tax

Richmond Council has said they will not take enforcement action if residents are temporarily unable to pay their council tax. If that is your situation, contact your local council to come to an agreement. Speak to your utility providers about payment structures if you can’t pay your bills (see links below)

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