There is some confusion around the help available to the businesses and the self-employed to try and ensure the effects of this global pandemic do not lead to financial ruin.
This blog post is meant to provide some clarification on what’s available to the self employed…
Self-Employed Income Support
Self-employed workers will be able to apply for a grant of up to 80% of their earnings, up to a maximum of £2,500 per month. This is initially for 3 months and will be paid as a single lump sum but will likely not arrive until June 2020. Payments will be backdated to March 2020. Anyone with taxable profits over £50,000 does not qualify for the scheme.
The grant will be taxable and will be based on the average of the last 3 years tax returns. For those with less than 3 years of tax returns the government will use what they can. Anyone who receives the grant can continue to work if able to.
It does mean that to be eligible, people will need to have filed a tax return. Anyone who hasn’t filed a tax return for the 2018-19 tax year yet, has until 23 April 2020 to get it done and still qualify.
HMRC will contact those they believe are eligible for the scheme and will invite them to apply online.
Universal credit is an option for those really struggling or for those self-employed workers who don’t qualify. The amounts paid have been boosted and some requirements relaxed, but you will need to meet the eligibility criteria.
Income Tax Deferral
For those who have completed self assessment tax returns, income tax payments due in July 2020 have been deferred until January 2021. This is automatic and you do not have to apply for it.
Mortgage Payment Holidays
Mortgage holidays are available for up to 3 months for all homeowners who are up to date on mortgage payments.
They are also available to Buy to Let landlords whose tenants have been financially affected by the Coronavirus, however, the benefit of these payment holidays is expected to be passed on to tenants.
You will still need to pay back the full amount to the lender. This will normally mean an increase to your monthly payments after the payment holiday.
If anything else is announced I will update you when possible.
Stay safe and well everyone.