News

Last night we were pleased to see the package announced from the UK Government to support self-employed people affected by the Coronavirus crisis. We asked some of our accounting firm Associates what this means for our members and their thoughts on the situation. 

Big Star Business Management – bigstarbiz.co.uk

Published 27th March 2020.

THAT BLOODY VIRUS………

We are living in very testing times and our absolute priority should be to look after those we love but we also have to live. The Government’s support approach has been pretty swift, offering a wealth of packages aimed at getting us to the other side, but beware there is plenty of misinformation out there. We should also exercise a degree of patience, think about the volume of claims that are going to be processed, and via an infrastructure that in most cases is yet to be made available. HMRC have recruited significant resource to help here but you will not receive anything next week, or probably next month. So cashflow is key, make it last!

Wading through what’s available to determine eligibility is key. Make sure you claim for everything that you are due but don’t abuse the system. HMRC are not daft and will be policing claims so anything untoward will be penalised. Everyone needs to get what they deserve right? So lets share it out properly and legitimately.

Here’s a list of what’s available. Probably not comprehensive as I’m sure (hope) there’s more to come:

• VAT and Personal Tax payment deferrals. Those lovely people at HMRC have agreed that we can delay settlement of certain categories of tax. This is useful but remember it won’t go away and will need to be paid further down the line.
• Small Business Grant Funding – Your local authority will make contact if you qualify
• Business Rates Holiday. Applies to music venues only. Hopefully this scheme will be expanded to include related businesses.
• Business Interruption Loan. Really cheap money but it will need repaying, and there are plenty of hoops to jump through to determine eligibility
• The Job Retention Scheme – This will be up and running by the end of April 2020. Businesses will be able to claim either 80% or up to £2500 of salary (plus related national insurance and pension) per month for employees you lay off for the period 1st March to 31^st May 2020. They cannot work during this time, at all!!
• …..and finally, what in excess of over 70% of those who work within the music industry have been waiting for, The Self Employment Support Scheme (SESS). This is a taxable grant worth 80% of trading profits up to £2,500 per month for 3 months (March to May). As this is hot off the press then detail is still sketchy, But hey, it’s something! HMRC will be in touch.

Outside of Government, review your overheads, talk to your landlord and other suppliers with a view to achieving a discount or a delay of non-essential expenditure. For a business it’s all about cashflow.

We have to get through this, its difficult both financially and mentally. Use your time to catch up on the boring stuff such as admin that been hanging around for ages and start planning for the future. Stay positive and don’t watch the news too often.

SRLV – srlv.co.uk

Published 27th March 2020.

Self-Employed Income Support Scheme

Last night the Chancellor announced the Government’s new Coronavirus business grant for the self-employed.

We only have the outline so far, and it may be some days or weeks before further information becomes available:

• Applies to the self-employed, including partners (in business partnerships)
• It is based on trading profits, therefore landlords will not normally qualify

Conditions apply: 

• You must have been self-employed at 5 April 2019 i.e. you will need to have shown self-employed income on your tax return for that year (if you have not yet filed your 2019 tax return, you have until 23 April to do this)
• You must also have traded in 2019/20, be still trading (or you would be were it not for COVID-19) and intending to continue trading into 2020/21.
• You must have lost business as a result of COVID-19
• Your self-employment income must be below £50k – measured either in 2018/19 or averaged over the three years ending with 2018/19
• Your self-employment income must be more than half of your total income – measured the same way (2018/19 or three-year average) as you select for your calculation of the £50k limit
• The assistance takes the form of a taxable grant
• The scheme will initially last for three months (March, April, May), but may be extended
• Each monthly payment will be calculated as 1/12^th of 80% of the average of the taxable profits on your 2016/17, 2017/18 and 2018/19 tax returns
• As with the corresponding scheme for furloughed employees, it will be subject to a monthly cap of £2,500
• Will be ready no later than the beginning of June HMRC will contact you directly if they believe you may be eligible (they can of course access tax return details from their systems)
• They have asked that you do not contact them in the meantime
• Applications will be made only through the official gov.uk website
• The grant will be paid straight into your bank account, in a single instalment

This scheme will be administered only through the official gov.uk website. If someone texts, calls or emails claiming to be from HMRC, saying that you can claim financial help or are owed a tax refund, and asks you to click on a link or to give information such as your name, credit card or bank details, it is a scam.

The Chancellor gave a strong hint that the quid pro quo for this assistance was that National Insurance rates for self-employed would be raised to be equal to the rates paid by employees, but he refused to be drawn into giving further details and the change would therefore not appear to be imminent.

Other measures have previously been announced that can be accessed by the self-employed, including:

• Coronavirus Business Interruption Loan Scheme
• Deferral of the 31 July second payment on account for 2019/20
• Can access Universal Credit in full

As noted before, any payment of VAT due in the period now until the 30 June can also be deferred until 5 April 2021, and we would remind businesses to cancel their Direct Debit if they normally pay their VAT this way.