The Chancellor has today announced additional support to prop up the UK economy during the Covid-19 pandemic.
The much needed support for the self-employed has now been announced in the form of the self Employed Income Support Scheme. It is excepted that the scheme will benefit 95% of the self-employed population.
The government will pay a taxable grant equal to the lower of:
- 80% of average monthly profits from the last three years; or
- £2,500
To be eligible for the scheme the following conditions must be met:
- The majority of your income must be from self-employment
- A tax return must have been submitted for the year ended 5th April 2019. Anyone who hasn’t yet submitted a return has been granted a grace period of 4 weeks from today to submit a return
- Average trading profits over the last three years must not exceed £50,000. If less than three years profits are available then only the available figures will be used
The Government have confirmed that anyone eligible for the scheme will be contacted automatically by HMRC, there is no need for anyone to apply. Payments are expected to be made in June and will be backdated to 1st March. The scheme is expected to last for three months but will be extended if required.
Anyone who is in need of financial support today that cannot wait until June for payment has been encouraged to take advantage of the other reliefs already available.
July payments on accounts
HM Revenue & Customs (“HMRC”) have today confirmed that, if you are required to make a payment on account on the 31 July 2020, this may be deferred until 31 January 2021. Previously, this was only available to the self-employed but this has now been extended to all taxpayers within self-assessment. They have also confirmed that no interest or penalty charges will apply. HMRC have advised that where possible, taxpayers should still make the payment, subject to cash flow.
VAT deferral
We would also remind people that whilst the deferral of VAT payments until after the end of June is an automatic relief, VAT returns do still need to be submitted to HMRC. Direct debits should also be cancelled to ensure automatic payments are not made.
Fraudulent correspondence
We have heard reports of scam emails and text messages being sent out asking for bank details in order for financial support to be provided. HMRC will never ask for your bank details in an email or text message so please be extra vigilant.
If you require any information on any of the support being offered by the government during this time, please do contact your usual RPG contact.
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