What you need to do to access this help
It’s frequently misunderstood by those who’ve never worked for themselves and can be seen through the prism of popular culture as either being incredibly risky and precarious or for the flighty and those who want to avoid the commitment of a regular position.
Nothing could be further from the truth.
Of the 4.8 million self employed workers in the sector that collectively make up 15% of the working population, the self employed, on average, work longer hours and perform a greater variety of tasks and essential duties within a business than a salaried employee in a traditional business.
It’s a standing joke among self-employed circles that if they ever committed their job description to paper it would encircle the globe.
The Coronavirus pandemic is far from a laughing matter for the self employed now but there is some help now available to them.
The government announced a Coronavirus Self-employment Income Support Scheme (CSISS) for both the self employed and members of partnerships that have lost income due to the impact of COVID-19.
This is a taxable grant worth up to approx. 80% of their trading profits up to a maximum of £2,500 per month for the next three months – although this may be extended if needed.
The criteria for eligibility includes having previously submitted an Income Tax Self Assessment tax return for the tax year 2018/19, are currently trading and plan to continue trading in 2020/21.
Anyone who traded during this period and is yet to submit a tax return for 2018/19 has until 23rd April to do it.
Self-employed trading profits must be £50,000 or less and more than half your income must have come from this activity.
The grant received will be 80% of the average profits taken from the 2016/17; 2017/18 and 2018/19 tax years.
HMRC will add together the total profit for these three periods and divide it by three. They’ll then pay this figure or an amount up to a maximum of £2,500 per month directly into their bank account in one instalment.
Individuals who claim tax credits will have to include any grant received as part of their income.
How can you claim?
HMRC are contacting eligible claimants and inviting them to apply online. UPDATE – the scheme launches on May 13th 2020. If accepted, applicants will receive the money within six working days.
Sadly, as always seems to happen when these schemes are announced, fraudsters are looking to take advantage of people’s confusion and are texting, calling and emailing self employed workers claiming to be from HMRC and offering financial help or an advance tax refund.
They’ll usually ask them to click a link or give personal information such as their name, credit card or bank details. These are scams and should not be responded to.
Self-employed workers and business owners might also be eligible for some of the other initiatives available including deferral of Self Assessment Income Tax Payments; cash grants for businesses with low or no business rateable value; the Business Interruption Loan Scheme or increased amounts of Universal Credit.
Self-employed directors who are paid through PAYE will be able to get additional support through the Job Retention Scheme too. The scheme entitles employees, which they technically are if they receive PAYE, up to 80% of earnings that are received via PAYE up to a cap of £2,500.
Dividends are not taken into account.
We’re always here to help
Depending who you ask, the self-employed sector has either been left to fend for itself or has been backed-up quickly and strongly.
The answer might rely entirely on whether you have received any support or advice yet otherwise you might feel like you’re twisting in the wind, waiting for help that may or may not arrive in time to save your livelihood.
Fortunately you can get in touch with us straight away or whenever you want to.
Our team of experienced, expert advisors have dealt with self-employed company owners and directors for several years and can appreciate the nuances and ebbs and flows that separates the all-encompassing nature of self-employment from a “day job”.
A free initial consultation will help you focus on what you need for your business right now and what you can plan to do in the days, weeks and months ahead to bring some needed certainty and structure to a world that, at times, seems to have given up on and decided to make it up as it goes along instead.