Coronavirus: Self Employed

Last updated 19 May 2020.

For support and more information visit https://www.gov.uk/coronavirus/business-support.

The Government said we would do whatever it takes to protect people’s jobs and incomes – and we meant it. I know many self-employed people across our Borough are deeply anxious about the support available for them.

That is why the Chancellor announced a new Self-Employed Income Support Scheme – helping many of our country’s self-employed workers: the musicians, the sound engineers, the plumbers, the electricians, the taxi drivers, the hairdressers, the childminders, the driving instructors, and many others. Through this scheme, the Government will pay self-employed people a grant worth 80 per cent of their average monthly profits over the last three years, up to £2,500 a month – that’s unlike almost any other country and makes our scheme one of the most generous in the world.

I know there are challenging times ahead, but I am confident that the measures put in place will support millions of people, businesses and self-employed workers to get through this, and emerge on the other side both stronger and more united as a country. And we will get through this together. 

Self Employed Income Support Scheme

We are launching the Self-Employed Income Support Scheme, to make sure people who work for themselves are getting the financial support they need.

  • If you have not submitted your Self Assessment tax return for the tax year 2018 to 2019, you must do this by 23 April 2020 or you will not be able to claim. HMRC will review any late returns in the usual way.
  • The Government will pay self-employed people across the whole UK who have been adversely affected by Coronavirus a grant worth 80 per cent of their average monthly profits over the last three years, up to £2,500 a month, for three months – but we will extend it for longer if necessary. 
  • We will make it simple for self-employed people to get the financial support they need. Self-employed people who are eligible will be contacted by HMRC directly, asked to fill out a simple online form, and HMRC will pay the grant directly into their bank account. We expect people to access the scheme by the beginning of June.
  • We are ensuring our support reaches those self-employed people who are most in need of it. The scheme will only be open to those with trading profits up to £50,000, leaving 95 per cent of people who are majority self-employed eligible for the scheme. HMRC will also ask people to demonstrate that the majority of their income comes from self-employment, and, to minimise fraud, only those who are already in self-employment, and who have a tax return for 2019, will be able to apply.
  • The grant will be subject to Income Tax and National Insurance contributions but does not need to be repaid.
  • You can make a claim for Universal Credit while you wait for the grant.

Full information is available at https://www.gov.uk/guidance/claim-a-grant-through-the-coronavirus-covid-19-self-employment-income-support-scheme

 

Self Assessment Payment Deferral

If you are due to pay a Self Assessment payment on account by 31 July 2020, you can defer payment up until January 2021. You will not be charged any interest or penalties during the deferral period.

The deferment is optional. If you are still able to pay your second payment on 31 July, you should do so.

This is an automatic offer. You do not need to apply for the deferral, or tell HMRC. If you normally pay by Direct Debit you should contact your bank to cancel your Direct Debit as soon as you can. You do not need to contact HMRC before doing this.

Coronavirus Business Interruption Loan Scheme

You may also be eligible for Business Interruption Payment to cover the first 12 months of interest payments and any lender fees. The government will give lenders 80% guarantee on each loan (subject to pre-lender cap on claims) to give lenders further confidence in continuing to provide finance to SMEs. The government will not charge businesses or banks for this guarantee.

You may be eligible for this scheme if you meet all of the following criteria:

  • Your business is UK-based, with a turnover of no more than £45 million per year
  • You have a borrowing proposal which would be considered viable by the lender, if not for the current pandemic
  • You can self-certify that Coronavirus (COVID-19) has adversely impacted your business

The full rules of the Scheme and the list of accredited lenders is available on the British Business Bank website . All the major banks offer the Scheme as do a number of smaller finance companies and you can contact these lenders directly to discuss a CBILS loan. 

If you have an existing loan with monthly repayments you may want to ask for a repayment holiday to help with cash flow.

HMRC Time To Pay

All businesses 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.

These arrangements are agreed on a case-by-case basis and are tailored to individual circumstances and liabilities.

If you have missed a tax payment or you might miss your next payment due to COVID-19, please call HMRC’s dedicated helpline: 0800 0159 559.

If you’re worried about a future payment, please call them nearer the time due to the volume of current calls. 

Bounce Back Loan Scheme

For small businesses a new micro loan, free from interest for the first 12 months, up to the value of 25 per cent of turnover, with a cap of £50,000, is now available.

These are not be subject to business liability tests or complex eligibility criteria, and are 100% backed by the Government.

You can apply for a loan if your business:

  • is based in the UK
  • was established before 1 March 2020
  • has been adversely impacted by the coronavirus
  • has a business bank account

Businesses from any sector can apply, except:

  • banks, insurers and reinsurers (but not insurance brokers)
  • public-sector bodies
  • state-funded primary and secondary schools

You cannot apply if you’re already claiming under:

  • Coronavirus Business Interruption Loan Scheme (CBILS)
  • Coronavirus Large Business Interruption Loan Scheme (CLBILS)
  • COVID-19 Corporate Financing Facility

However if you’ve already received a loan of up to £50,000 under one of these schemes you can transfer it into the Bounce Back Loan scheme. You have until 4 November 2020 to arrange this with your lender.

For more information click here

Support with the cost of living

A significant amount of work has gone into supporting incomes through this period, using new Government Schemes such as the Self-Employed Income Support Scheme, SSP from day 1 and easier access to Universal Credit. But, both I and the Government recognise that some jobs will still, unfortunately, be lost as a result of this disease. That is why an equal amount of work has gone into helping with the cost of living so that if you need extra help, or are not eligible for some schemes, you can still look after yourself and your family. 

These additional, cost of living, measures include:

  • Mortgage holidays of 3 months, using a quick and simple application process through your lender. This has been a negotiation between Government and the major UK mortgage lenders who have committed to providing payment holidays of 3 months where these are needed. If you think you might need access to this, please contact your lender directly. 
  • Rent holidays of 3 months and a ban on evictions. Working with the banks, the Government has negotiated to ensure that landlords can also get payment holidays on their buy-to-let mortgages, allowing them to pass on payment holidays to tenants struggling due to Coronavirus. A blanket ban on evictions has also been introduced for 3 months, allowing everyone to stay in their home during this vital period. 
  • Temporary payment freezes on loans and credit cards for up to 3 months. If you think you might need to freeze any payments, you should speak to your lender immediately. 
  • For those with an arranged overdraft on their main personal current account, up to £500 charged at zero interest for 3 months.
  • Making sure that all overdraft customers are no worse off on price when compared to the prices that they were charged before recent overdraft pricing changes.
  • Ensuring that anyone using any of these temporary payment freeze measures will not have their credit file affected.

 

I fully understand that now is a particularly difficult time if you are self-employed and I am committed to doing everything I can to help.