Government Aid for Self Employed & Small Businesses
Please see the links below for the latest updates on measures available for businesses, self employed and employees.
On 27/03/2020 the Chancellor unveiled his measures for the self employed that have been hit by the current lockdown and virus outbreak.
From the initial information available it would appear that the support will be based on an average of the 3 years taxable profit per returns submitted for the tax years of 2017, 2018 and 2019. Anyone who does not have three years of self employment I currently believe the allowance will be based on the information available, but they must have submitted a personal tax return for 2018/19.
Support will be limited to a maximum of £2,500 and will not be paid until sometime in June 2020, possibly towards the end of that month.
People who will not be covered are anyone whose taxable profit was above £50,000, anyone who received less than 50% of their income from self employment, and anyone who only commenced self employment after 06/04/19.
HMRC will contact self employed individuals directly if they are eligible for this support, with application being made via an as yet unavailable on line portal.
The support will be provided by the end of June 2020, and backdated to 01/03/20.
Further details have also become available re the furloughing of staff, and the 80% support given to cover payroll costs and job retention.
- The PAYE scheme must have been set up and running prior to 28/02/20.
- Relief will only be given for the salary, so small businesses where directors received salary and dividends will only receive 80% of the salary element.
- Workers must not work whilst furloughed.
- Employers will be reimbursed for 80% of the employees salary up to a maximum of £2,500/month. The 20% shortfall may be made up by the employer, but I don't believe it is mandatory to do so.
- Please see the attachment included with the email I sent on Thursday 26/03/20 for detailed guidance and example letters on this.
Small Business Grant Scheme
The government is providing a one off grant of £10,000 to eligible businesses. To be eligible you must occupy a business property, receive Small Business Rates Relief, and be based in England.
Hence any business run from home, with no business premises will not qualify.
Funding is being provided to Local Authorities who will write to you if you are eligible.
For anyone not covered by one of the above schemes, or needing funding to survive until payments become available, then the government is suggesting support is sought via Business Interruption Loans or claiming Universal Tax Credits. Certainly not an ideal situation for those concerned.
I have also received reports of banks requesting personal guarantees and security for any loans given.
Whilst the Chancellor has granted a deferral of VAT payments due between 20 March 2020 and 30 June 2020, it should be noted that for any business that would normally pay their liability via Direct Debit they need to cancel the Direct Debit otherwise the payment will still be taken.
PLEASE DO READ THE LINKS. I have tried to pick out the most salient points, but everyone's circumstances are slightly different. The measures the Chancellor has taken aim to provide support to many people and businesses, but there are still an awful lot of people who are not covered by any of the above, such as anybody commencing self employment after 6 April 2019, For these there only seems to be the support of Universal Credit claims, along with any other benefits they may be entitled to. There is also, understandably, going to be the delay in getting the above systems in place and the support to claimants.
We are living though an extraordinary time that will require effort, patience and some perseverance from all of us, but I do feel confident that we should all come through this.
Should you wish to discuss your own individual situation then do please get in touch (see "Contact" page), as the information available is constantly changing. I will try and give you what advice I can based on the information as I currently understand it.