It now seems like months ago everything started closing and the world went on lockdown. The Government announcements have come thick and fast and, at times, been hard to keep track of. Here are some of the highlights for assisting those who are self-employed.
Updated 27 March 2020
VAT - No VAT payments will be required between the dates 20 March and 30 June. VAT liabilities that become due between those dates will automatically be deferred and would need to be paid by 31 March 2021. However, it would appear that if your VAT period ends on 31 May, your VAT will be due for payment as normal on 7 July. You can of course continue to make payments should you wish to ignore the deferment.
Income Tax - If you have a payment on account due on 31 July 2020 this will automatically be deferred to 31 January 2021. As above you can continue to make payments should you wish to ignore the deferment.
Tax Payment Support - If you already have an outstanding tax liability that you expect to struggle to pay HMRC have set up a dedicated Time To Pay Covid-19 helpline. You can call this on 0800 0159 559.
Coronavirus Business Interruption Loan Scheme - SMEs now have access to loans of up to £5M with repayment terms up to 6 years. The Government will guarantee 80% of the balance, they will pay all interest and fees for the first 12 months, and there are no fees to access the scheme. More details on how to apply can be found here.
Coronavirus Job Retention Scheme - The government through HMRC have promised to reimburse 80% of furloughed workers wage costs up to a cap of £2,500. The web-based system for application and reimbursement is not yet operational and the details on how to claim are very sketchy. It appears that claims will be based on employee's PAYE history. More information will be released in the fullness of time as HMRC try to develop and implement the scheme. It is currently unknown if directors can put themselves on furlough and then claim the relief. You can find more details on the scheme here.
Scottish Business Support Grants - Last week, in line with the UK Gov Chancellor's announcement, the Scottish Government declared their commitment to small business with a £1 billion fund to provide grants. Currently however it is only rate paying businesses, with some exceptions, that qualify for assistance from this fund.
A one-off grant of £10,000 is available to small businesses who get the Small Business Bonus Scheme relief, Rural Rates relief, or Nursery Relief. If you receive or qualify for any of these reliefs then you can apply.
Businesses in the retail, hospitality and leisure industries with a rateable value between £18,001-£51,000 will be able to apply for a one-off grant of £25,000. On first glance this appears to be quite restrictive but it actually covers a vast swathe of businesses. I would recommend taking a look at the sectors covered and consider making a claim.
The scheme is now open and applications should be made directly to your local authority. You can find the application form for the Shetland Island Council here. Other local authorities can be found here. The closing date for applications is 31 March 2021.
A £3,000 small business grant was announced last week but since then no detail has come to light and appears to have been pushed aside. Currently the only other assistance available to the self-employed is Universal Credit. This is a kick in the teeth to small operations working from home or other non-business premises*.
*The Self-Employed Income Support Scheme - On 26 March 2020 the Chancellor Rishi Sunak announced the Self-Employed Income Support Scheme. This is a similar package to that of employees as it seeks to provide sole-traders with a grant equal to 80% of their average month’s profit. You can find more details about the scheme here.
If you would like to know more or would like to discuss any aspect of your business, please do not hesitate to contact me.
