UK Government Help for Self Employed - Announcement

Deal editor314
Posted 26th Mar
The government package for the self employed is just being announced. Some highlights:

  • Government will pay self-employed a grant of 80% of their average monthly profits over last 3 years - up to £2,500 a month, to to help them cope with coronavirus crisis. Support will initially last three months.
  • Must have a tax return for 2019 to apply. July deadline for self-assessment deferred to January. Open to anyone with trading profits up to £50,000.
  • It will cover 95% of self-employed people. Treats them the same as government measures for other workers.
  • Access to scheme should be no later than June
  • If you have only 1 or 2 years tax returns it can be based on those. You do not need 3 full years.
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Community manager
We're waiting for full guidance to be published by the government but for now some key points:

How do I apply?

It was said that HMRC will have details for all of those that are eligible for this service. You do not need to apply and HMRC will contact you automatically when the system is in place.

What if I only have 1 years of accounts?

The government confirmed that as long as you have a single tax return you will be eligible.

Why have they mentioned 3 years of returns?

In order to get an average they are working on up to 3 years of returns. This is to help those who have had volatile years. An average will be taken of all three years.

How long will this initiative last?

To begin with it has been said that this will be valid for 3 months. The same was said for the employed system. No one can predict how long this crisis will last so hopefully it will be extended.

What if I do not have a years accounts?

You will not be able ot benefit from this.

What if I have employed and self employed income?

We're waiting on full confirmation but it was said that you can use whichever is your main income. So if your employment brings in more money then it it unlikely you can claim for self employed income.

When will this be live?

No confirmed date but it is hoped from June.

Please note that the above is based on the press conference and we'll add more information when the full guidance is published,
Misc
Top comments
This is a good news for self employed with proper tax return
The self employed who fiddle there earnings will get 80% of there fiddled earnings! Karma
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apur3226/03/2020 17:15

This is a good news for self employed with proper tax return


Yes self employed unicorns!
314 Comments
This is a good news for self employed with proper tax return
Excellent news
apur3226/03/2020 17:15

This is a good news for self employed with proper tax return


Yes self employed unicorns!
A grant means it's not repayable right?
Nothing if you became self-employed in the last 12-18 months though...
Edited by: "ck12111" 26th Mar
themorgatron26/03/2020 17:22

A grant means it's not repayable right?


Yes. They are lending the money to get you through it. You will then pay it back through your tax return at a later date.
So July's return (half of tax) owed isn't payable til January?
ck1211126/03/2020 17:23

Nothing if you became self-employed in the last 12-18 months though...


No is you did you tax return in Jan (or can send it in now) then they will use this data.
If it's less than this you can apply for universal credit.
On the flip side if you are self-employed and have not being 'paid in' getting universal credit is a massive win. Rather than having to pay a grant back.

Swings and roundabouts.
Anyone know what the deal is if you are a full time employee but also have a self employed business as well, are you still eligible to claim for this?
GAVINLEWISHUKD26/03/2020 17:23

Yes. They are lending the money to get you through it. You will then pay …Yes. They are lending the money to get you through it. You will then pay it back through your tax return at a later date.




What does pay it back through your tax return mean? I thought I knew the difference between a grant and a loan.
Neo160726/03/2020 17:27

Anyone know what the deal is if you are a full time employee but also have …Anyone know what the deal is if you are a full time employee but also have a self employed business as well, are you still eligible to claim for this?


He said something along the lines of for fairness only if self-employment is your main income.
Mark_EvansA8j26/03/2020 17:26

So July's return (half of tax) owed isn't payable til January?


Yes you can defer it "if needed".

Not sure as yet if it's you or HMRC who choose.

So you will probably have to file the paperwork but then not pay. Then if you do have large cash reserves in your business they will make you pay sooner than January.

But at the moment who knows.
themorgatron26/03/2020 17:27

What does pay it back through your tax return mean? I thought I knew the …What does pay it back through your tax return mean? I thought I knew the difference between a grant and a loan.


No such thing as a free lunch!

Yes bit sneaky calling it a grant. But you didn't really think they were just going to handing out free money?
GAVINLEWISHUKD26/03/2020 17:26

No is you did you tax return in Jan (or can send it in now) then they will …No is you did you tax return in Jan (or can send it in now) then they will use this data.If it's less than this you can apply for universal credit.On the flip side if you are self-employed and have not being 'paid in' getting universal credit is a massive win. Rather than having to pay a grant back.Swings and roundabouts.


Jan tax return applies to the 18/19 tax year though, so not if you started being self employed after April 2019...
ck1211126/03/2020 17:35

Jan tax return applies to the 18/19 tax year though, so not if you started …Jan tax return applies to the 18/19 tax year though, so not if you started being self employed after April 2019...


"so not if you started being self employed after April 2019..."

It's only the 26th March 2020 today. So you will have to apply for universal credit.
However, the tax the self-employed pay will be raised to be in line with the rate employed people pay, next year.
randomdeal26/03/2020 17:40

However, the tax the self-employed pay will be raised to be in line with …However, the tax the self-employed pay will be raised to be in line with the rate employed people pay, next year.


Makes sense given that they are getting a similar benefit but are paying less tax than the employed.
GAVINLEWISHUKD26/03/2020 17:23

Yes. They are lending the money to get you through it. You will then pay …Yes. They are lending the money to get you through it. You will then pay it back through your tax return at a later date.


Well that's not a grant then it's a loan as far as I'm concerned.
If you did indeed need to pay it back surely the lowest self employed earners would be better of just claiming universal credit.
I'm self employed and had to cease trading during this outbreak but will commence trading once its over and I've just finished applying for universal credit today but now don't know what to actually do after this announcement!
Edited by: "PaulandPam" 26th Mar
randomdeal26/03/2020 17:40

However, the tax the self-employed pay will be raised to be in line with …However, the tax the self-employed pay will be raised to be in line with the rate employed people pay, next year.


Which many people would agree with.

Pay yourself holiday pay, pension and sick pay out you company profits and get taxed like everybody else.

I'm sure your accountant will work his magic to leave you in the best possible position.
PaulandPam26/03/2020 17:45

Well that's not a grant then it's a loan as far as I'm concerned.If you …Well that's not a grant then it's a loan as far as I'm concerned.If you did indeed need to pay it back surely the lowest self employed earners would be better of just claiming universal credit.


It's not a loan, it's a grant, you don't have to pay it back.

Of course, you will be taxed more later on, to pay for all of this largesse, but that will come later...
bozo00726/03/2020 17:44

Makes sense given that they are getting a similar benefit but are paying …Makes sense given that they are getting a similar benefit but are paying less tax than the employed.


Yes, that's the reasoning the Chancellor gave. It has to be paid for somehow.
GAVINLEWISHUKD26/03/2020 17:33

No such thing as a free lunch! Yes bit sneaky calling it a grant. But …No such thing as a free lunch! Yes bit sneaky calling it a grant. But you didn't really think they were just going to handing out free money?


It is not a grant, why would they let the later perfect tax collection be the enemy of the grant.
My brother has only been self-employed for 2 months, straight from his apprenticeship with no 2019 tax return. No clear guidance on how he will receive any money
PaulandPam26/03/2020 17:45

Well that's not a grant then it's a loan as far as I'm concerned.If you …Well that's not a grant then it's a loan as far as I'm concerned.If you did indeed need to pay it back surely the lowest self employed earners would be better of just claiming universal credit.


Yes for some people claiming UC will be beneficial. It will still be added to your end of year tax return.
But the reality is most self employed people would much prefer to have a real wage that they can pay back later, than the tiny sums UC would give them.

It's about getting people and the country through this and not how many pennies you can pinch.
amy.foreman26/03/2020 17:50

My brother has only been self-employed for 2 months, straight from his …My brother has only been self-employed for 2 months, straight from his apprenticeship with no 2019 tax return. No clear guidance on how he will receive any money


Universal Credit as he can’t claim the self employed grant?
GAVINLEWISHUKD26/03/2020 17:51

Yes for some people claiming UC will be beneficial. It will still be added …Yes for some people claiming UC will be beneficial. It will still be added to your end of year tax return.But the reality is most self employed people would much prefer to have a real wage that they can pay back later, than the tiny sums UC would give them.It's about getting people and the country through this and not how many pennies you can pinch.


I think you may be wrong looking at other comments here and from what can work out.
From what I understand the government plan to get the money back by equalising tax and National insurance payments for both self employed and employed people.
What bloody good would a grant that you had to pay back be?? when I could just get a bank loan ??
Edited by: "PaulandPam" 26th Mar
GAVINLEWISHUKD26/03/2020 17:46

Which many people would agree with. Pay yourself holiday pay, pension and …Which many people would agree with. Pay yourself holiday pay, pension and sick pay out you company profits and get taxed like everybody else.I'm sure your accountant will work his magic to leave you in the best possible position.


Probably fair. However, I'm effectively unemployed having my freelance projects dry up due to the crisis, so a grant (that I don't have the means to pay off) isn't going to help me.
Edited by: "randomdeal" 26th Mar
splender26/03/2020 17:49

It is not a grant, why would they let the later perfect tax collection be …It is not a grant, why would they let the later perfect tax collection be the enemy of the grant.


It is a grant
randomdeal26/03/2020 17:57

Probably fair. However, I'm effectively unemployed having my freelance …Probably fair. However, I'm effectively unemployed having my freelance projects dry up due to the crisis, so a grant (that I don't have the means to pay off) isn't going to help me.


You don't pay it off, it's a grant, I'd be more worried about getting my hands on the cash in June in your position...
PaulandPam26/03/2020 17:54

I think you may be wrong looking at other comments here and from what can …I think you may be wrong looking at other comments here and from what can work out.From what I understand the government plan to get the money back by equalising tax and National insurance payments for both self employed and employed people.


It will have to sit as a tax burden on you/your company. Otherwise people would just close the business and just start afresh.

Realistically new tax/NI rules for self employed won't start until April 2021 at the earliest.

I'm not saying I'm right or wrong. We don't have the government documents yet. So I am filling i
in the gaps as makes sense from all parties.

Guess will just have to watch this space.
The self employed who fiddle there earnings will get 80% of there fiddled earnings! Karma
zcaprd726/03/2020 17:48

It's not a loan, it's a grant, you don't have to pay it back.Of course, …It's not a loan, it's a grant, you don't have to pay it back.Of course, you will be taxed more later on, to pay for all of this largesse, but that will come later...


That's exactly the way I understand it but Gavinlewishukd seems to have his own ideas.
randomdeal26/03/2020 17:57

Probably fair. However, I'm effectively unemployed having my freelance …Probably fair. However, I'm effectively unemployed having my freelance projects dry up due to the crisis, so a grant (that I don't have the means to pay off) isn't going to help me.


Well I'm guessing you were profitable in the past. So reasons are you will be in the future.
Yes it's hard now but you have to think the long game. Good luck.
Wife is a supply teacher. Works through an agency and pays tax on her earnings through the agency. She is now out of work and gets nothing. Can’t claim anything as I earn too much. Our household income has halved. I don’t really want to add interest to my mortgage and loans as the government has forced her not to work to , let’s face it, September when schools hopefully open again. He said no one will be left behind. Can’t trust a Tory.
zcaprd726/03/2020 18:03

You don't pay it off, it's a grant, I'd be more worried about getting my …You don't pay it off, it's a grant, I'd be more worried about getting my hands on the cash in June in your position...


OK, well that's good that you don't have to pay it off. That was my immediate impression from the announcement but comments started off on here that it was a loan.
PaulandPam26/03/2020 18:06

That's exactly the way I understand it but Gavinlewishukd seems to have …That's exactly the way I understand it but Gavinlewishukd seems to have his own ideas.


It's coming out of an unfunded central pot, it won't be a burden on your tax return, in the same was a company claiming the 80% of an employee's salary will be a grant.

It will, however, be a philosophical burden, when we come around to paying for all this, but that will be something for our children to worry about, no doubt
GAVINLEWISHUKD26/03/2020 18:04

It will have to sit as a tax burden on you/your company. Otherwise people …It will have to sit as a tax burden on you/your company. Otherwise people would just close the business and just start afresh.Realistically new tax/NI rules for self employed won't start until April 2021 at the earliest.I'm not saying I'm right or wrong. We don't have the government documents yet. So I am filling iin the gaps as makes sense from all parties.Guess will just have to watch this space.


But did he not say the tax/Ni would be equalised for employed and self employed to pay for this?
Nothing was said about attaching the dept to the individual person was mentioned.
GAVINLEWISHUKD26/03/2020 18:07

Well I'm guessing you were profitable in the past. So reasons are you will …Well I'm guessing you were profitable in the past. So reasons are you will be in the future. Yes it's hard now but you have to think the long game. Good luck.


It's been a gradually declining for me but having clients in industries affected by the current crisis has had a knock-on effect on me and projects have dried up now. Thanks for your best wishes. I agree, thinking long term is the best plan, as it's all about adapting to where the market is going and the demand for work.
amy.foreman26/03/2020 17:50

My brother has only been self-employed for 2 months, straight from his …My brother has only been self-employed for 2 months, straight from his apprenticeship with no 2019 tax return. No clear guidance on how he will receive any money


Guidance is clear no tax certificate and it’s universal credit up to £1800 a month.
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