The most recent update of schemes which are to be put in place for businesses and self – employed people who will be affected by COVID-19.
Due to the current global pandemic, businesses and the self–employed people are struggling to continue trading and earning an income and it has been difficult to understand how HM Government and HMRC planned to support them. HM Government has since confirmed that those who have any outstanding tax liabilities may be entitled to receive the necessary support.
“HMRC’S Time To Pay Service” is the service where any tax affairs support will be provided. Depending on each specific case, a unique support plan will be designed and put into place for a business or self-employed person. It will consist of tailor-made circumstances and accountabilities.
As an overall prediction 95% of self–employed people within the UK will be supported. Up to 80% of a self–employed person’s average monthly profits for the last 3 years will be granted. However, the grant cannot exceed £2,500 per month to any one person and is only given to those directly affected by the COVID-19 (coronavirus) pandemic. Those who are eligible will be supported for the duration of 3 months.
Criteria for Self – Employed Support:
- You pay income tax in the UK
- Trading Profits were no more than £50,000 for the last 3 years
- Self – Employment is the main source of income
- You are registered as self – employed from your submitted tax return for the tax year 2018 to 2019
Any other variants of these requirements are when specific judgments will have to be tailor-made to the self – employed.
Business Interruption Scheme:
The Business Interruption Scheme provides support for small businesses within the UK, especially those whose cash flow will be interrupted, lost or late due to the coronavirus.
To be eligible:
- The Company must be UK based
- Have an annual turnover of no more than 45 million
- You have to be able to prove that the company has directly been affected by the outbreak.
- Have a solid plan of how to utilize the funding given by the scheme will ensure that the business is able to stay afloat and continue trading as normally as possible.
Businesses who are eligible, depending on circumstances, can receive up to £2,500 finance. Depending on how much you apply for in the first place, you must provide a sound proposal that explains why borrowing larger amounts of money will ensure you have safe security to meet a lender’s normal requirements. When it comes to repayment fees, there are no upfront costs and the first year of repayments will be lower. You must repay the full amount you receive, however the first year is interest free.
Similar to the Self- Employed, the Government is giving lenders a guaranteed 80% of money in which to lend.
The schemes will potentially be fully up and running by the beginning of June. However there are still uncertainties as to when HMRC will begin making payments.
Businesses and self – employed people who are concerned about their tax affairs during this time are urged to call the HMRC Helpline on 0800 0159 559.
The most recent and relevant information is also available at: GOV.UK
Guidance for employers is available on: GOV.UK
Alternatively, find out what we can do to help with COVID-19 here here