We hope that you, family and friends are safe and well at this devastating time. Theatre, opera, comedy, TV and film have suffered closures, cancellations and postponements. Let’s hope for a full recovery and a cultural resurgence after the tough times have passed.
On 26 March the Chancellor finally made an announcement of how the self-employed would be helped during this Covid-19 outbreak in addition to the postponement of the second 2019/20 payment on account originally due by 31 July 2020 now payable 31 January 2021.
A taxable grant will be available if your profit from self-employment for 2018/19 or your average profit from self-employment from the last three years, is below £50,000 provided that your profit from self-employment is more than 50% of your taxable income. This recognises the fluctuating profits of performers! The amount will be 80% of the relevant tax years’ taxable profits per month for three months with a monthly cap of £2,500. This will be paid as one lump sum, by June. The government will contact eligible taxpayers in due course and payments will be made directly into your account. Do not be duped by scammers!
You will find your self-employment profit figure on your tax calculations. If you started your self-employment more recently, the average of the last two will be used or if 2018/19 is the only one, then that will be used. Unfortunately, if you started your self-employment in the current tax year, then you will be looking at Universal Credit.
The grant is taxable, so will need to be declared in your 2020/21 tax return.
If you are late filing your 2018/19 tax return, you have till 23 April to submit to avoid missing out altogether. Don’t delay if that applies to you!
Businesses with a dedicated business bank account can draw on a Business Interruption Loan from a bank if needed. Any additional support to directors of limited companies awaits clarification.
If you are VAT registered, payments of VAT due between 20 March and 30 June 2020 can be deferred up to 31 March 2021. If you have a direct debit set up to pay VAT and you want to make use of the payment holiday, you will need to cancel the direct debit (don’t leave it too close to the payment date though!) and then re-set it later to recommence the direct debits.
If you need to talk to HMRC about tax payments, HMRC has set up a coronavirus helpline: 0800 024 1222.
Below are some useful links:
Self-employment support scheme: https://www.gov.uk/guidance/claim-a-grant-through-the-coronavirus-covid-19-self-employment-income-support-scheme
Support for businesses: https://www.gov.uk/government/publications/guidance-to-employers-and-businesses-about-covid-19/covid-19-support-for-businesses
Delay VAT payments: https://www.gov.uk/guidance/deferral-of-vat-payments-due-to-coronavirus-covid-19
Universal Credit: https://www.gov.uk/universal-credit
Corona virus HMRC helpline: https://www.gov.uk/government/organisations/hm-revenue-customs/contact/coronavirus-covid-19-helpline