Support for Self-Employed People:
We know many self-employed people are deeply anxious about the support available for them. Alongside other measures, the Chancellor has announced a new Self-Employment Income Support Scheme – helping many of our country’s self-employed workers adversely affected by Covid-19: the musicians, the sound engineers, the plumbers, the electricians, the taxi drivers, the hairdressers, the childminders, and many others.
Self-Employment Income Support Scheme:
- The Government has extended the SEISS for those self-employed who continue to trade. The SEISS Grant Extension, combined with the up to £15,000 worth of support in SEISS 1 & 2, is amongst the most generous schemes for the self-employed in the world.
- Small business owners will also benefit from the Local Restrictions Support Grant scheme.
- Self-employed traders with employees will also be able to claim the JSS in respect of their employees, under the same terms as any other employer.
- The Chancellor has announced that SEISS generosity levels will be increased to 40% of average monthly trading profits capped at £3,750 in total for the first instalment, covering a three-month period from the start of November 2020 to the end of January 2021.
- Any self-employed individual is eligible as long as they were eligible for the original SEISS grant and are either currently actively trading and impacted by reduced demand, or were previously trading, intend to continue trading, but cannot currently trade due to coronavirus.
Time to Pay (HMRC)
- 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.
- This support is available now, and arrangements are agreed on a case-by-case basis and are tailored to individual circumstances and liabilities.
- HMRC has set up a helpline to support businesses and self-employed people concerned about not being able to pay their tax due to Coronavirus.
- Anyone who is running a business or is self-employed and is concerned about paying their tax due to COVID-19 (Coronavirus), can call HMRC’s helpline for help and advice: 0800 024 1222. More guidance is available on GOV.UK
- As of 15 June, there were over 70,000 new deferrals in place related to Covid-19, accounting for £11.63 billion of tax liabilities.
Self-Assessment 2018-19 Tax returns
- HMRC has taken the decision not to charge individuals and businesses daily penalties where someone has been late in filing their 2018-19 Self-Assessment Tax return. This is in recognition of the exceptionally difficult circumstances many taxpayers have faced due to the impact of COVID-19, during the period when the daily penalties accrued.
- The mandatory 6-month and 12-monthly penalties will apply for 2018-19 tax returns as normal and HMRC continue to require customers to file their returns where they are able to. HMRC will consider Coronavirus as a reasonable excuse for missing return deadlines.
- Self Assessment customers can apply online for additional support to help spread the cost of their tax bill into monthly payments, without the need to call HMRC.
- The online payment plan service can already be used to set up instalment arrangements for paying tax liabilities up to £10,000. From the 1st of October 2020, HMRC has increased the threshold to £30,000 for Self Assessment customers, to help ease any potential financial burden they may be experiencing due to the coronavirus pandemic. The increased self-serve time to pay limit of £30,000 follows the Chancellor of the Exchequer’s announcement on the 24th of September to increase support for businesses and individuals through the uncertain months ahead.
- Around 1.5 million businesses who pay through income tax self-assessment benefitted from our Self-Assessment Tax Deferral, deferring an estimated £6 billion to be paid in July 2020 to the end of January 2021. But to help them further, we are upgrading our Time To Pay service so that all 11 million self-assessment taxpayers will be able to create a 12-month payment arrangement for up to £30,000 each, and extended under the end of January 2022 – that’s an 18 month deferral.
Further Self-Employment Support
- For self-employed people, the Government has also:
- deferred income tax self-assessment payments for July until the end of January 2021
- suspended the minimum income floor for twelve months, meaning self-employed people can now access Universal Credit at a rate that is equivalent to Statutory Sick Pay for employees.
- Those on contributory ESA will be able to claim from day 1, instead of day 8. The Government has relaxed the requirement to physically attend a jobcentre, everything can be done by phone or online.
- Many self-employed people will also be able to access loans through the Coronavirus Business Interruption Loans Scheme.
- See 'support for individuals' page for further avenues of financial support such as help with mortgages and energy bills.
To quickly and easily find out about what financial support you may be available for, use the Government's Coronavirus Business Support Finder, https://www.gov.uk/business-coronavirus-support-finder
Page Last Updated: 22/10/20.