Anna’s Accountancy Alerts – March 2020, Week 52 – Updated For Self-Employment Provisions

Close up of business people working with business document during discussion at meeting.

Support For Businesses, Self-Employed, Employers & Employees Through Coronavirus

Job Retention Scheme

All UK employers will be able to access support to continue paying part of their employees’ salary for those employees that would otherwise have been laid off during this crisis.

How To Access The Scheme

You will need to:

  • designate affected employees as ‘furloughed workers,’ and notify your employees of this change – changing the status of employees remains subject to existing employment law and, depending on the employment contract, may be subject to negotiation
  • submit information to HMRC about the employees that have been furloughed and their earnings through a new online portal (HMRC will set out further details on the information required)

HMRC will reimburse 80% of furloughed workers wage costs, up to a cap of £2,500 per month. It will be backdated to 1 March. Hopefully the first grants will be paid by the end of April 2020. The scheme is initially intended to run for three months but may be extended.

Can I Furlough Employees Now?

In the absence of full guidance from the government on how the Job retention Scheme will work, it may be best to not take action immediately.

Directors Of Their Own Company

Directors of their own company paid through PAYE, will be able to get support.

VAT Deferral

For VAT, the deferral will apply from 20 March 2020 until 30 June 2020.

Taxpayers will be given until the end of the 2020 to 2021 tax year to pay any liabilities that have accumulated during the deferral period.

Businesses planning to use the three-month VAT payment deferral need to cancel their direct debits to ensure payments are not automatically deducted.

VAT refunds and reclaims will be paid by the government as normal.

Self-Assessment Deferral

Payments due on the 31 July 2020 will be deferred until the 31 January 2021.

HMRC have also scaled up their Time to Pay offer to all firms and individuals who are in temporary financial distress as a result of Covid-19 and have outstanding tax liabilities.

Sick Pay To Employees

Small-and medium-sized businesses and employers will be able to reclaim Statutory Sick Pay (SSP) paid for sickness absence due to COVID-19. The eligibility criteria for the scheme will be as follows:

  • this refund will cover up to 2 weeks’ SSP per eligible employee who has been off work because of COVID-19
  • employers with fewer than 250 employees will be eligible – the size of an employer will be determined by the number of people they employed as of 28 February 2020
  • employers will be able to reclaim expenditure for any employee who has claimed SSP (according to the new eligibility criteria) as a result of COVID-19
  • employers should maintain records of staff absences and payments of SSP, but employees will not need to provide a GP fit note. If evidence is required by an employer, those with symptoms of coronavirus can get an isolation note from NHS 111 onlineand those who live with someone that has symptoms can get a note from the NHS website
  • eligible period for the scheme will commence the day after the regulations on the extension of SSP to those staying at home comes into force
  • the government will work with employers over the coming months to set up the repayment mechanism for employers as soon as possible

How To Access The Scheme

A rebate scheme is being developed. Further details will be provided in due course once the legalisation has passed.

Support For Retail, Hospitality And Leisure Businesses That Pay Business Rates

How To Access Any Of The Rates Support

There is no action for you. This will apply to your next council tax bill in April 2020. However, local authorities may have to reissue your bill automatically to exclude the business rate charge. They will do this as soon as possible.

Business Rates Holiday For Retail, Hospitality And Leisure Businesses

A business rates holiday for retail, hospitality and leisure businesses in England for the 2020 to 2021 tax year.

Businesses that received the retail discount in the 2019 to 2020 tax year will be rebilled by their local authority as soon as possible.

Cash Grants For Retail, Hospitality And Leisure Businesses

The Retail and Hospitality Grant Scheme provides businesses in the retail, hospitality and leisure sectors with a cash grant of up to £25,000 per property.

For businesses in these sectors with a rateable value of under £15,000, they will receive a grant of £10,000.

For businesses in these sectors with a rateable value of between £15,001 and £51,000, they will receive a grant of £25,000.

How To Access The Scheme

You do not need to do anything. Your local authority will write to you if you are eligible for this grant.

Nursery Businesses Business Rates

We will introduce a business rates holiday for nurseries in England for the 2020 to 2021 tax year.

Support For Businesses That Pay Little Or No Business Rates

The government will provide additional Small Business Grant Scheme funding for local authorities to support small businesses that already pay little or no business rates because of small business rate relief (SBBR), rural rate relief (RRR) and tapered relief. This will provide a one-off grant of £10,000 to eligible businesses to help meet their ongoing business costs.

Business Interruption Loan Scheme

This is now available for applications to support primarily small and medium-sized businesses to access bank lending and overdrafts.

If your business needs short term cash flow support, you may be eligible for a Coronavirus Business Interruption Loan.

How To Access The Scheme

You should talk to your bank or finance provider (not the British Business Bank) as soon as possible and discuss your business plan with them.

The scheme is available through more than 40 accredited lenders, which are listed on the British Business Bank website and include all the major high street banks, including Barclays, HSBC and NatWest.

If you have an existing loan with monthly repayments you may want to ask for a repayment holiday to help with cash flow.

Businesses Paying Tax: Time To Pay Service

All businesses and self-employed people in financial distress, and with outstanding tax liabilities, may be eligible to receive support with their tax affairs through HMRC’s Time To Pay service.

These arrangements are agreed on a case-by-case basis and are tailored to individual circumstances and liabilities.

How To Access The Scheme

If you have missed a tax payment or you might miss your next payment due to COVID-19, please call HMRC’s dedicated helpline: 0800 024 1222. This is a new number to cope with increased capacity.

If you’re worried about a future payment, please call HMRC nearer the time.

Insurance

Businesses that have cover for both pandemics and government-ordered closure should be covered, as the government and insurance industry confirmed on 17 March 2020 that advice to avoid pubs, theatres etc is sufficient to make a claim as long as all other terms and conditions are met.

Insurance policies differ significantly, so businesses are encouraged to check the terms and conditions of their specific policy and contact their providers. Most businesses are unlikely to be covered, as standard business interruption insurance policies are dependent on damage to property and will exclude pandemics.

Companies House Extends Accounts Filing Deadline

Companies House is granting an extension for companies for filing company accounts, due to the current public health situation and the impact of coronavirus on staff who may be unwell or self-isolating

According to the Companies House website, if, immediately before the filing deadline, it becomes apparent that accounts will not be filed on time due to the company being affected by coronavirus, the company may make an application to extend the period allowed for filing.

Companies House has changed its policy to automatically allow for a two-month extension and then another month after that if companies can demonstrate extreme circumstances.

 

 

Self-Employment Income Support Scheme

Use this scheme if you’re self-employed or a member of a partnership and have lost income due to coronavirus.

Self-employed people do not need to get in touch with HMRC as the scheme isn’t yet open for applications. HMRC will contact eligible customers by the beginning of June, inviting them to apply.

This scheme will allow you to claim a taxable grant worth 80% of your trading profits up to a maximum of £2,500 per month for the next 3 months. This may be extended if needed.

Who Can Apply

You can apply if you’re a self-employed individual or a member of a partnership and you:

  • have submitted your Income Tax Self Assessment tax return for the tax year 2018-19
  • traded in the tax year 2019-20
  • are trading when you apply, or would be except for COVID-19
  • intend to continue to trade in the tax year 2020-21
  • have lost trading/partnership trading profits due to COVID-19

Your self-employed trading profits must also be less than £50,000 and more than half of your income come from self-employment.

If you started trading between 2016-19, HMRC will only use those years for which you filed a Self-Assessment tax return.

If you have not submitted your Income Tax Self-Assessment tax return for the tax year 2018-19, you must do this by 23 April 2020.

HMRC will use data on 2018-19 returns already submitted to identify those eligible and will risk assess any late returns filed before the 23 April 2020 deadline in the usual way.

How Much You’ll Get

You’ll get a taxable grant which will be 80% of the average profits from the tax years (where applicable):

  • 2016 to 2017
  • 2017 to 2018
  • 2018 to 2019

To work out the average HMRC will add together the total trading profit for the 3 tax years (where applicable) then divide by 3 (where applicable), and use this to calculate a monthly amount.

It will be up to a maximum of £2,500 per month for 3 months.

We’ll pay the grant directly into your bank account, in one instalment.

After You’ve Applied

Once HMRC has received your claim and you are eligible for the grant, they will contact you to tell you how much you will get and the payment details.

If you claim tax credits you’ll need to include the grant in your claim as income.

 

 

Support For Employees Through The Coronavirus 

Sick Pay

You can get £94.25 per week Statutory Sick Pay (SSP) if you’re too ill to work. It’s paid by your employer for up to 28 weeks.

If you are staying at home because of COVID-19 you can now claim SSP. This includes individuals who are caring for people in the same household and therefore have been advised to do a household quarantine.

To check your sick pay entitlement, you should talk to your employer, and visit the Statutory Sick Pay (SSP) page for more information.

SSP Start Date

From day 1

Once the legislation has been passed, this will apply retrospectively from 13 March.

Proof Of Sickness

If you have COVID-19 or are advised to stay at home, you can get an ‘isolation note’ by visiting NHS 111 online, rather than visiting a doctor. For COVID-19 cases this replaces the usual need to provide a ‘fit note’ (sometimes called a ‘sick note’) after 7 days of sickness absence.

Isolation notes will also be accepted by Jobcentre Plus as evidence of your inability to attend.

If You’re Self-Employed Or Not Eligible For SSP

If you are not eligible for SSP – for example if you are self-employed or earning below the Lower Earnings Limit of £118 per week – and you have COVID-19 or are advised to stay at home, you can now more easily make a claim for Universal Credit or new style Employment and Support Allowance.

If you are eligible for new style Employment and Support Allowance, it will now be payable from day 1 of sickness, rather than day 8, if you have COVID-19 or are advised to stay at home.

Furloughed Workers

If your employer cannot cover staff costs due to COVID-19, they may be able to access support to continue paying part of your wage, to avoid redundancies.

If your employer intends to access the Coronavirus Job Retention Scheme, they will discuss with you becoming classified as a furloughed worker. This would mean that you are kept on your employer’s payroll, rather than being laid off.

To qualify for this scheme, you should not undertake work for them while you are furloughed. This will allow your employer to claim a grant of up to 80% of your wage for all employment costs, up to a cap of £2,500 per month.

You will remain employed while furloughed. Your employer could choose to fund the differences between this payment and your salary, but does not have to.

If your salary is reduced as a result of these changes, you may be eligible for support through the welfare system, including Universal Credit.

We intend for the Coronavirus Job Retention Scheme to run for at least 3 months from 1 March 2020, but will extend if necessary.

Claiming Benefits

Whether you are currently in or out of work, if you are on a low income and affected by the economic impacts of COVID-19, you will be able to access the full range of the welfare system, including Universal Credit.

From 6 April we are increasing the standard allowance in Universal Credit and the basic element in Working Tax Credit for 1 year. Both will increase by £20 per week on top of planned annual uprating. This will apply to all new and existing Universal Credit claimants and to existing Working Tax Credit claimants.

If You Have COVID-19 Or Are Staying At Home

You are now able to claim Universal Credit, and if required can access advance payments upfront without needing to attend a jobcentre.

If You Are Self-Employed

You are able to claim Universal Credit, providing you meet the usual eligibility criteria.

To support you with the economic impact of the outbreak, and allow you to follow government guidance on self-isolation and social distancing, from 6 April the requirements of the Minimum Income Floor will be temporarily relaxed. This change will apply to all Universal Credit claimants and will last for the duration of the outbreak.

New claimants will not need to attend the jobcentre to demonstrate gainful self-employment.

Support For Rent Costs

You should check your eligibility for Universal Credit, which is available for people in and out of work. Support for rental costs will be paid through Universal Credit.

From April, we are increasing Local Housing Allowance rates to the 30th percentile of market rents. This applies to all private renters who are new or existing Universal Credit housing element claimants and to existing Housing Benefit claimants.

Businesses Rally To Support NHS Workers

The coronavirus crisis has seen an outpouring of business support for NHS workers, with companies large and small taking steps to offer medical staff free food, and streamlined access to essential services such as supermarkets and car parking facilities

BP has announced two initiatives, both of which are expected to be in place until at least the end of April.

Firstly, BP will supply free fuel to the UK’s emergency services vehicles during the current crisis.

Through BP’s own fuel cards and an arrangement with fuel card provider Allstar – whose cards are also used widely throughout the UK’s emergency services – ambulance, fire and police service vehicles will be able to fill up without being charged for the cost of fuel at BP’s network of 1,200 retail sites nationally.

 

Secondly, BP will offer delivery of food and convenience goods purchased from its network of company-owned convenience stores without delivery charge.

BP is in the process of expanding the number of its retail sites from which Deliveroo deliveries can be ordered and is working to arrange for delivery charges to be waived. Deliveries of both M&S products and other convenience goods in stock will be able to be arranged and no premium will be charged on delivered items.

As well as dedicated shopping hours for NHS staff, supermarkets and other high street chains are offering a range of discounts and free items for frontline workers.  Pret, Starbucks and Greggs have given away free coffees, and pizza companies, healthfood chain Leon and others have provided free food.

Car park provider NCP is offering NHS staff free parking at over 150 car parks across the UK.

NHS staff need to pre-book online any time up to an hour before arriving, and the offer is valid for bookings and exits until end of April. There are no restrictions on the number of days which can be pre-booked in one booking.

Stay Up-To-Date With Coronavirus & Brexit News

Coronavirus has affected us all. Whether you’re a sole trader, employer or employee. Stay up to date with the latest news – including government support, tax implications, and more.