ROLLING COVID-19 TRACKER – SELF EMPLOYED < £50k
Rolling updates of the financial measures announced by the government to help the self employed survive in these turbulent times
To help you understand all of the tax and financial measures announced by the government, we have created this Rolling COVID-19 Tracker which we will update daily as new measures and clarity on exiting measures are announced.
This page looks at the measures that have been announced that might relate to you if you are self employed. We have assumed that if you are self- employed with profits under £50k that you are not VAT registered and probably don’t pay rates on a rented properly. If you do, you will find these measures on our main COVID-19 tracker.
If you are in financial distress due to COVID-19 you can call the new HMRC COVID-19 helpline – Tel: 0800 024 1222
Bookmark this page and check back regularly.
On 19 March 2020 the Bank of England cut interest rates to a historic low of 0.1%, having previously reduced them to 0.25% on the day of the Spring Budget.
All UK mortgage holders can apply for a 3 month mortgage holiday IF they are adversely affected by COVID-19.
Call your mortgage provider and ask for the holiday if you believe you are going to be adversely impacted.
Many lenders have texted their customers and asked that they don't call them, but apply online.
After the 3 month payment holiday, you will see a small uplift in your monthly repayment as the unpaid repayment is added to the remaining balance of your loan.
Updates from 31st October 2020
For mortgage holders who have been adversely affected COVID-19 - mortgage payment holidays have been extended from 3 months to 6 months. If you have already taken a 3 month holiday you can extend it to 6.
If you have not taken a mortgage payment holiday yet, you can apply for one now and until the 31st January 2021.
Interest continues to accrue but your credit rating will not be adversely affected.
Time To Pay Arrangements
Generous time to pay arrangements on current tax arrears
Do call HMRC, but expect to sit on hold, they have a huge rise in calls and a lot off staff off or self isolating. Be patient!
Income Tax - Deferred
A simple way of getting cash to the self-employed, is to defer taxes.
Rather than give money, HMRC have taken less money... for now.
Self-assessment income tax payments for the self-employed which were due on 31 July 2020 can now be deferred until 31 January 2021.
Deferral is automatic, you don't need to ask to defer.
If you have put that money aside, you can now use it to fund living expenses instead.
If you haven't put cash aside, it does at least give you more time to fund your 2021 bill.
Ringfence the money into a separate bank account and only spend it if you absolutely have to.
Updates 24 September 2020
Self-Service Time To Pay Scheme Announced
The Chancellor announced that taxpayers with up to £30,000 of Self-Assessment liabilities due on 31 January 2021, whether deferred from July 2020 or otherwise due by 31 January under self-assessment, could make payment in 12 monthly instalments under the time to pay arrangements.
This means the final payment would not be due until January 2022
Individuals will be able to log onto their personal government gateway and set up a time to pay arrangement without calling HMRC. the application will get automatic and immediate approval.
If their SA debts are over £30,000, or they need longer than 12 months to repay their debt in full, they will still be able to use our Time to Pay arrangement by calling HMRC.
Access to Welfare For Low Income Individuals
The minimum income floor for access to universal credit has been suspended for low income individuals affected by the economic impact of coronavirus.
This support is available if needed for the lowest-income individuals and families affected by COVID-19, regardless of employment status.
Self-employed Income Support Scheme (SEISS)
Announced 26 March 2020
- Those who are already self-employed and facing financial difficulties are asked to apply.
- The scheme will cover up to 80% of average profits over the past three years, up to £2,500 per month, for at least three months.
- Those with trading profits of more than £50,000 are not eligible.
- Eligibility is determined with reference to earnings in 2018/19 as reported on tax returns filed this year.
- What next? Application will be to HMRC via an online platform, yet to launch. The grants probably won’t be available until June 2020, backdated to 1 March. In the meantime, self-employed people who can’t work are expected to claim universal credit, access to which was broadened in the Spring Budget.
Updates from 04 May 2020
HMRC will open the SEISS claims portal on 13th May 2020. Eligibles customer will be contacted by HMRC and invited to apply.
The scheme covered 80% of average monthly profits over the three years 2016/17, 2017/18 and 2018/19.
The first period covered 01 March 2020 to 31 May 2020 and will pay up to £7500 for the three months.
Updates from 29 May 2020
The Chancellor also announced plans to extend the Self-Employment Income Support Scheme (SEISS) for those people whose trade continues to be, or is newly, adversely affected by COVID-19 (coronavirus).
Eligible self-employed people will be able to claim a second and final SEISS grant in August; this will be a taxable grant worth 70% of their average monthly trading profits for three months, paid out in a single instalment and capped at £6,570 in total.
The scheme covered 70% of average monthly profits over the three years 2016/17, 2017/18 and 2018/19.
For the second SEISS grant the business must be adversely affected on or after 14 July 2020.
Self employed parents who took time out to have children are now eligible to claim.
The second period covered the period 01 Jun 2020 to end October 2020 with the claim deadline being 19th October.
A 5 month period covered but only 3 months of grant relief at 70% received.
Updates from 24 September 2020
SEISS extended for a further 6 months to help the self employed from November 2020 to April 2021.
SEISS-3, will be calculated at 20% of average monthly profits, based on the same profit figures used for the earlier grants, ie the self-employed profits reported on tax returns for 2016/17 to 2018/19.
However, there are some further conditions for the SEISS-3 grant:
- The trader must be were eligible for the previous SEISS grants;
- The trader must be actively trading when claiming the SEISS-3 grant; and
- Business sales must have been reduced due to the covid-19 pandemic in the period from 1 November 2020 to the date of the claim.
The SEISS-3 grant will be capped at £1,875 for three months, working out at just £625 per month.
A fourth grant: SEISS-4 will be payable for the period February to April 2021. We don’t know how much that grant will be or what the cap will be. The qualifying conditions for the SEISS-4 grant are likely to be similar to those for the SEISS-3 grant.
The profits used as the basis for the SEISS-4 grant will also be the average annual profits derived from tax returns for 2016/17 to 2018/19
Updates from 23 October 2020
The value of the first SEISS-3 Grant Extension, covering the period November 2020 to the end of January 2021, will double. This means that the UK government will provide an initial SEISS grant based on 40% of three months’ average trading profits, paid out in a single instalment, and capped at £3,750 in total.
To ensure that support will be targeted to those who most need it, SEISS Grant Extension will be available to self-employed individuals who temporarily cannot trade as well as those continuing to trade and facing reduced demand due to COVID-19.
The business no longer has to be “adversely affected” by the coronavirus pandemic, but must instead be suffering from reduced demand due to coronavirus. The emphasis is on turnover not on profits.
HMRC will provide full details about claiming and applications in guidance on GOV.UK in mid-November
Updates from 03 November 2020
The generosity of the Self-Employment Income Support Scheme (SEISS) Grant Extension will be increased from 40% of average trading profits, to 55%.
SEISS-3 will cover a three-month period from the start of November until the end of January. The government will provide a taxable grant covering 55% of average monthly trading profits, paid out in a single instalment covering three months’ profits, capped at £5,160 in total.
In addition, the opening of the service has been brought forward from 14 December to 30 November.
Updates from 05 November 2020
The Chancellor announced that the UK Government is increasing the overall level of the next SEISS grant from 55% to 80% of trading profits.
This grant will cover a three-month period from the start of November until the end of January. The UK Government will pay a taxable grant which is based on 80% of three months’ average trading profits, paid out in a single instalment and capped at £7,500.
The SEISS Grant Extension will last for six months in total, from 1 November 2020 to 30 April 2021. A further grant will cover February to April, as grants will be paid in two lump sum instalments each covering a three-month period. The Government will set out further details, including the level of that grant, in due course.
Full details on how to claim will be published on GOV.UK week commencing 23 November.