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Coronavirus Update – Self-Employed Income Support Scheme

The following information is current as at 9:00 am on Friday 27 March.

The UK Government is continuing to provide daily updates and publications on their measures to deal with the disruptions caused by COVID-19.  The Thursday evening update announced a significant and very welcomed Self-Employed Income Support Scheme.  There have also been other updates on Business Rates Holiday Extension, MOTs and Taxable Expenses If Employees Working From Home.

Useful links to UK Government guidance and our previous updates can be found at the end of this article.

Self-Employed Income Support Scheme

The UK Government announced an income support scheme which will provide grants to self-employed individuals or partnerships whose income has been negatively impacted by COVID-19.  The scheme will provide a grant to self-employed individuals or partnerships, worth 80% of their profits up to a cap of £2,500 per month.

To be eligible for the scheme you must:

  • be self-employed or a member of a partnership;
  • have lost trading / partnership trading profits due to COVID-19;
  • have filed their 2018/19 self-assessment tax return;
  • have traded during the 2019/20 tax year, be currently trading and intend to continue to trade in the 2020/21 tax year;
  • have the majority of their income from self-employment and average profits of less than £50,000 per annum;

Other points to note are:

  • Initially the scheme will cover the 3 months ending 31 May 2020 and is expected to begin to be paid from early June 2020.
  • HMRC will contact all individuals who qualify for the grant.  Individuals should not contact HMRC now.
  • HMRC will use the average profits from tax returns in 2016/17, 2017/18 and 2018/19 to calculate the size of the grant.
  • Those individuals who have missed the 2018/19 self-assessment tax return deadline and not yet filed their return have 4 weeks from 26 March to do so to be eligible for the grant.
  • The grants will be taxable.
  • Be careful of fraudsters pretending to be HMRC.

If self-employed individuals require funds before early June, the UK Government is advising them to look at the Coronavirus Business Interruption Loan Scheme or Universal Credit.

As a final note.  Due to the complexities of the self-employed sector the Chancellor confirmed anyone who became self-employed during the 2019/20 tax year will not be eligible for the scheme.  As these individuals have not filed a tax return there would be nothing to base the grant on.  They can continue to access the Coronavirus Business Interruption Loan Scheme or Universal Credit.

Full guidance from the UK Government on this can be found here and here.

Business Rates Holiday Extension

The UK Government has extended the Business Rates Retail Discount, giving a 100% discount on business rates to the retail sector during 2020/21, to estate agents and bingo halls.

MOTs

Vehicle owners have been granted a 6-month exemption from MOT testing.  All cars, vans and motorcycles needing a test from 30 March 2020 will qualify.  This exemption will last 12 months.

The UK Government comments that vehicles must continue to be kept in a roadworthy condition, and garages will remain open for essential repair work.  Drivers will still be prosecuted if driving unsafe vehicles.

Taxable Expenses If Employees Work From Home

The UK Government has provided a guide on the tax implication of expenses paid to employees for working from home.  This includes costs such as the mobile phones, broadband, computer equipment and house running costs.

The guidance can be found here.

Links

Our previous updates can be found on Facebook and LinkedIn or on our website blog.

A UK Government business support website can be found here.  It contains guidance on all Coronavirus A UK Government general COVID-19 support website can be found here.  It contains guidance on all matters pertaining to the Coronavirus.

We will continue to monitor the situation and keep you informed. If you have any concerns, please do not hesitate to contact us. Like you we are doing our best to deal with the situation, and we must all pull together to see this through.

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