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Life in Lockdown

Life in Lockdown

Friday, 12 June 2020

When I sit down to write these articles, I try to come up with a topical subject that is also useful to the potential readership. Sometimes that is easy and sometimes not so much! We had the subject of Brexit, a new Government, difficulties surrounding the Budget, and when that all seemed to calm down slightly, along came Coronavirus.

Days of prudent financial management went out the window and we discovered a bottomless pit of money to try to save the wellbeing of the country, through investing in the fight against COVID-19, supporting the NHS and care agencies, research funding to find a vaccine or treatment, and trying to make sure that as many jobs and business are still there when we come out the other side. Nobody knows when that might be, there could be a sudden breakthrough, or it could be a very gradual.

We are on a war footing, not dissimilar to the two World Wars in the last century, where we just have to borrow and spend on the resources that we need to defeat COVID-19, and whilst this will be a burden for many years to come, we have little choice. I suppose the one redeeming factor is that we’re not the only country in this situation. It has affected, I am assuming every nation to a greater or lesser extent.

Some industries will suffer more than others. Hospitality and travel will potentially see the biggest losses, but hopefully many will bounce back leaner and meaner. I think we have all been affected one way or another, personally, for me it was the cancellation of some trips. Let’s hope that that this time next year myself and many others are counting down the days to our delayed trips overseas. At least with easing of lockdown our own tourism industry will hopefully receive a welcome boost.  

Self-Employment Income Support Scheme

We now have more information on the Self-Employment Income Support Scheme (SEISS), which allows eligible self-employed individuals to claim direct cash grants from HMRC.

Two separate grants are available and whilst the eligibility criteria are the same for both, applications for each grant must be completed separately.

The first grant is:

  • to cover your lost income for three months’ worth of profits
  • based on 80% of your average monthly trading profit over the last three years, based on your self-assessment tax returns submitted.
  • capped at £7,500 altogether
  • taxable, so this will have to be included on your tax return (This is a grant, so does not need to be repaid)
  • the deadline to submit your application for this claim is 13 July 2020

The second grant is:

  • to cover your lost income for a further three months’ worth of profits
  • based on 70% of your average monthly trading profit over the last three years, based on your self-assessment tax returns submitted.
  • capped at £6,570 altogether
  • taxable, so this will have to be included on your tax return (This is a grant, so does not need to be repaid)

As a self-employed person or partner in an unincorporated partnership, your trading profits must be below £50,000 to be eligible and at least equal to your non-trading profits. You must have traded in 2019/20 and be intending to continue to trade in 2020/21. Recipients of the grant can continue to work, start a new trade, take on employment or carry out voluntary work.

HMRC will first look at the individual’s tax return for 2018/19 to see if trading profits were no more than £50,000 and at least equal to the individual’s non-trading income for that year. If the individual is not eligible based on 2018/19 alone, HMRC will then look at average trading profits and non-trading income over 2016/17, 2017/18 and 2018/19, as relevant.

Action you can take now

Visit the GOV.UK website (link below) to check your eligibility to claim, using their online tool. You will need your Unique Taxpayer Reference (UTR) (which will be on any HMRC correspondence including your tax return), your Government Gateway User ID and your national insurance number. Once completed you will know whether HMRC think you will qualify, and they will estimate a date when you can claim.

HMRC are not allowing agents to claim on your behalf, so it is important you set up a government gateway now to allow a claim to be made as soon as possible. Once you have taken the eligibility test it will prompt you to either log in or to set up government gateway access.

Partnerships

Partners within a partnership must all prepare separate claims (not one partner on behalf of the partnership), so it is important each partner is able to access their government gateway account and make their own claim.

Making a claim

In preparation to making a claim, you should;

  • follow the link to assess whether you qualify as soon as possible
  • follow the instructions so that your gateway is set up and ready to make a claim
  • check your contact details from your gateway, HMRC will use these to contact you with regards to the claim, so it is important they are current to avoid delays

 

Please also note that there is lots of information on our website, and you also may be entitled to a bounce back loan to help get you going again. Visit our dedicated online COVID-19 Hub to find out more; https://www.larking-gowen.co.uk/coronavirus/

The Government also has an online tool to help you determine what support is available to you;

https://www.gov.uk/business-coronavirus-support-finder

Finally (I am sure this doesn’t apply to you) if you don’t have broadband and can’t set up a government gateway account to claim, there is a phone number you can call-  0800 024 1222.

 

If you have any queries or would like more information, you can contact me on 01473 833411 or peter.glading@larking-gowen.co.uk

 

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