A day can seem like a long time in politics
It’s safe to say that the famous phrase accredited to Harold Wilson about a week being a long time in politics seems like a luxury with political decisions having to be made so quickly now. With our landscape changing so rapidly, new measures in place almost daily and adjustments to the way we live our lives, we aim to keep you up to date with all decisions that could affect those of you in the media and sports industry. If you’re self-employed, the Chancellor has set out a ground-breaking UK-wide scheme to help you during COVID-19, bringing reassurance and support. For at least 3 months, direct cash grants will be available, here is more information from Rishi Sunak.
Self-employed individuals to get support from Chancellor
Hope has been provided to the thousands of self-employed professionals in your industry. The Chancellor in his latest announcement on 26 March has outlined who will be eligible to apply for the newly created Self-Employed Income Support Scheme. Taken over 3 years’ worth of records of average monthly trading profit, there will be a cash grant worth 80% available for those eligible.
Producing a package, cited as the most generous in the world so far, the Chancellor has recognised that self-employed people have a vital role in the UK’s workforce and that alongside business owners and those employed, they need reassurance and support. Covering 95% of those who receive most of their income from self-employment, it provides support to those who need help most. This brings parity with the recently announced Job Retention Scheme.
To qualify, you must have had a trading profit of less than £50,000 in 2018-19 and more than half of your income in 2016-17, 2017-18 and 2018-19 must have come from self-employment.
HMRC will automatically identify eligible taxpayers and contact them directly with further information about how to apply. To minimise the potential for fraudulent applications, HMRC has limited eligibility to those already in self-employment. At The Showbiz Accountant we can help you with any aspect of your application.
Covering the period 1 March to 31 May 2020, the Income Support Scheme is being designed from scratch by the HMRC and grants of one single lump sum payment covering all 3 months will start to be paid from the beginning of June 2020.
At this time, contacting HMRC will only delay the urgent work that is underway to get the scheme operational but be assured that they will be using your existing information to check eligibility and invite applications. If you have your own company and pay yourself a salary and dividends, you will not be covered by the scheme, however, you will be covered for your salary via the Coronavirus Job Retentions Scheme, if you’re operating PAYE schemes. We can provide you with advice about the tax implications for your limited company.
- Those in self- employment (i.e. submitted tax returns) or are a member of a partnership.
- Those with a trading profit less than £50,000
- Those who are trading or would be except for COVID-19 and have lost trading/partnership profits
- Those who intend to continue to trade in the tax year 2020-21
- Excludes those working through Limited Companies
If you started trading between 2016-19, HMRC will only use those years for which you filed a Self-Assessment tax return.
Importantly – If you have not submitted your Income Tax Self-Assessment tax return for the tax year 2018-19, you can do this by 23 April 2020. The Showbiz Accountant can help prepare a tax return during the coronavirus crisis for a fixed fee of £350.
How much will you get?
- You’ll get a taxable grant, paid in one cash sum covering the period 1/3/20 -31/5/20 and this will be 80% of the average profits from the tax years 2016-17, 2017-18 and 2018-19 (where applicable).
- This will be up to a maximum of £2,500 per month for 3 months and HMRC will pay the grant directly into your bank account, in one installment.
When will it be paid?
Grants will start to be paid at the beginning of June 2020
How can I access help?
- Individuals should not contact HMRC now as they will use existing information to check potential eligibility and invite applications once the scheme is operational.
- Talk to a member of The Showbiz Accountant team. We’re offering a tailored telephone consultation – free if you’ve not yet filed your tax return, you wish to understand the scale of your individual grant or access other sources of help to ease cash flow worries until June.
Extensive engagement with stakeholders such as the TUC, the Federation of Small Businesses and IPSE – The Association of Independent Professionals and the Self-Employed has played a crucial role in the design of the scheme intended to support those who need support. We are well placed to support the sports and media industry while we wait for the new scheme to be rolled out and can ease any concerns you are experiencing. We’ll continue to work on support for all the measures announced by the Chancellor and any further ones that are implemented.
The scheme has been designed after extensive engagement with stakeholders including the Self-Employed and individuals are already benefitting from a series of measures announced by the Chancellor to boost household incomes. With such a lot happening so quickly, it’s easy to be unsure about how to access the relevant support.
The Showbiz Accountant can help with being self-employed during the coronavirus or assist in applying for coronavirus specific loans and grants. We’ll help ease anxieties about how to access the wealth of help available and we’ll guide you through any necessary records needed for an application. Give me a call to discuss this further.
Most importantly, however, we hope you’re finding your own way to get through.
‘Hope is being able to see that there is light despite all of the darkness’ Desmond Tutu
I look forward to the day when I don’t have to finish with – stay safe!