Questions on self-employed challenges due to Covid restrictions

 

You need to think clearly and carefully as there are two options at this time:-

  1. hibernate your business until this is all over

  2. struggle on earning what you can

 

 

or……….

  1. Open a supermarket specializing in toilet rolls and pasta

 

 

 

Self-employment Income Support Scheme

Coronavirus (COVID-19)

 

HMRC text mostly. AMI comments in italics

This scheme will allow you to claim a taxable grant worth 80% of your trading profits up to a maximum of £2,500 per month for the next 3 months. This may be extended if needed.

Who can apply

You can apply if you’re a self-employed individual or a member of a partnership and you:

have submitted your Income Tax Self Assessment tax return for the tax year 2018-19

traded in the tax year 2019-20

are trading when you apply, or would be except for COVID-19

intend to continue to trade in the tax year 2020-21

have lost trading/partnership trading profits due to COVID-19

 

Available June 2020…about.

PS. They need a dictionary as you don’t apply, -they will write to you IF you are eligible (allegedly)

Too excited to wait?

 

Try their webshite, as you can check your status here

https://www.gov.uk/government/news/self-employed-invited-to-get-ready-to-make-their-claims-for-coronavirus-covid-19-support

Also

https://www.tax.service.gov.uk/self-employment-support/enter-unique-taxpayer-reference

 

PS. Note the site is running on a c.1985 amstrad, so you get loads of timeouts and errors. You just have to keep trying.

 

Once the site has allowed you in……

 

You need to know your utr and nino.

It then validates these (checks you can type).

But then it gets really tricky as YOU need to carry on by using your Government Gateway login.

Haven’t got one? Oh dear, you have to click on the link and apply for one.

If you survive the stress of that process you will then be able to proceed.

NB. HMRCy have perversely set this up so that Agents/accountants can’t help their clients through this process.

 

 

 

 

Your self-employed trading profits must also be less than £50,000 and more than half of your income come from self-employment. This is determined by at least one of the following conditions being true:

having trading profits/partnership trading profits in 2018-19 of less than £50,000 and these profits constitute more than half of your total taxable income

having average trading profits in 2016-17, 2017-18, and 2018-19 of less than £50,000 and these profits constitute more than half of your average taxable income in the same period

 

No barristers/lawyers eligible for the scheme

 

It must be your main source of income

 

Can I carry on running the shattered embers of my business ?   

 

Well, it’s an interesting question. 
Until HMRCy publish the formal guidance note we don’t know. The Furlough scheme certainly requires complete cessation of work. 

 

Help, I only started 18 months ago

If you started trading between 2016-19, HMRC will only use those years for which you filed a Self-Assessment tax return.

 

Do businesses make a profit in early years? You will get….£0.00.

 

Did you read my email to clients briefing them?

https://twitter.com/marcus_bernard/status/1243231413064871939?s=20

Is the grant taxable

yes, is a free lunch free?

What about my SA tax due

 

No payments needed until 31.1.2021

If you choose to defer your VAT payment as a result of coronavirus (COVID-19), you must pay the VAT due on or before 31 March 2021.

You do not need to tell HMRC that you are deferring your VAT payment

Paying VAT is now optional until 31.3.21.

Prediction…VAT bad debts in 2021 will go through the roof, just saying…..

Other help available?

Sign on like the 1m who did in last two weeks of March, and join the renowned Universal Benefits System.

Then relaaaaaaax catching up on all those TV Series you missed until the end of the restrictions

 

 

 

Thank you for reading this briefing.

 

All views are the writers, based on years of close relations with Her Majesty’s Revenue & Customs

 

Our Self-employed help proposal (ignored)

I think we have to go for a very rough and ready solution. 

 

Fill in an online form:-

  1. Invite HMRC to use the average from last 2 filed vat returns 

  2. Or make own self-declaration of last 6 months income

  3. Base compensation on that

  4. Discounted by the amount of expected sales in the covid recession 

  5. Underpinned by usual rights of hmrcy to request extra info

  6. And also some sort of retrospective clawback that when all this shit is over, and the annual accounts, SA tax return, is done that any excessive payment above the 80% level is refundable via tax payments 

 

Simples?? 

 

 

 

Links here

HMRC

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

Tax payments

https://www.gov.uk/government/publications/guidance-to-employers-and-businesses-about-covid-19/covid-19-support-for-businesses#support-for-businesses-through-deferring-vat-and-income-tax-payments

 

JM Swallow, FCA

Abell Morliss

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