There have been various announcements from the Government regarding financial help during the Coronavirus pandemic.
Last night, Chancellor Rishi Sunak announced a package of measures designed to support self-employed people. We are awaiting detail on a number of areas but here’s a summary of what we know so far.
Limited company / Personal Service Company (PSC) contractors
- Contractors working through their own PSC are not covered by the self-employed package.
- Guidance says PSC directors may be able to claim for a portion of their PAYE income only, through the Coronavirus Job Retention Scheme (CJRS).
- Many PSC directors only take a small salary so the value of this scheme will be small for them – but is better than nothing.
- PSC contractors will still be able to use ‘time to pay’ for Corporation Tax
- Personal tax instalments due in July 2020 will now not be payable until January 2021. Again, the tax will be due, but not for an extra six months.
- There’s no VAT to pay until at least June. Don’t pay VAT now, but be aware it’s likely you’ll need to catch up by March 2021. Don’t forget, this VAT doesn’t disappear, but is delayed in collection, so prepare and submit your returns in the usual way.
- There is an expectation that umbrella workers, subject to certain conditions, may be able to receive a salary via the Coronavirus Job Retention Scheme.
- However, there is still significant uncertainty around how this will work and industry bodies such as the FCSA are currently working with Government on these issues.
- We will update umbrella workers further when we can.
Individual self-employed workers (those who do not operate through their own limited company)
- The measures announced allow for a grant equal to 80% of average self-employed profits up to a maximum of £2,500 per months.
- It is only open to those with average self-employed profits of £50k or less.
- The grant will be based on average profits in the last three years or a shorter period if three years of records are not available.
- If you have not filed an 18/19 personal tax return you have four weeks to do so to qualify. The scheme will not be available if you have not filed your tax return for 18/19.
- Also, personal tax payments on account in July 2020 are now not due until January 2021.
- HMRC will contact you if you are eligible for the scheme and will invite you to apply online.
- Payments can be expected in June, backdated to March. The scheme will be extended if necessary.
The wider benefits system has some additional measures to assist those in financial hardship.
This legislation and other work the Government is doing is part of a constantly changing landscape. We will update you with further developments as soon as we can. For more information, please click here.