Updated on 12 November 2020.
Latest update following the government's announcement on 5 November 2020. As is the case with all announcements, it will be several days before the full details become clear and several weeks before the finer details are thrashed out. This page will be updated as and when we receive more information.
Let's start with a recap of all the help available to include the latest changes announced.
Coronavirus Self-employment Income Support Scheme (SEISS)
The government originally announced a grant allowing you to claim up to 80% of your monthly taxable trading profit for the period, initially for 3 months backdated to March. This grant was extended to cover the months of June to August and reduced to 70% of your monthly taxable trading profit for the period. You're unable to backdate claims for the first two grants available (the deadline for the second grant passed on 19 October 2020).
The government have announced an extension of this grant to cover the months of November 2020 to April 2021. The first grant will cover the 3 month period of November 2020 to January 2021. This will be at 80% of your monthly taxable trading profit for the 3 month period.
You'll be able to claim for the full 3 month period from 30 November 2020.
There is no information available yet on the second grant to cover the 3 month period of February 2021 to April 2021 but I would be very surprised if this didn't match the Coronavirus Job Retention Scheme rate of 80% for the months of February 2021 and March 2021.
Full details on eligibility and how to claim will be published in the week commencing 23 November 2020.
Let's break this down:
- Taxable trading profit is the figure on your Self Assessment tax calculation for profit from self employment
- It will be calculated from your 2019 tax return. If you filed a return in 2018, it will be calculated on an average of the 2 years, and if you filed a return in 2017, it will be calculated on an average of all 3 years
- If you will be filing a return in 2020 for the first time, unfortunately you are not eligible for this grant
- Your average profit based on the above must be less than £50,000 per annum
- Your profit from self employment must be over 50% of your total taxable income (this includes employment, property etc)
- The new grant will be capped at £7,500 in total (per 3 month period).
- It will be paid directly into your bank account in one instalment and will be taxable
- HMRC will contact you if you are eligible for the scheme and invite you to apply online. If they haven't, you can get more information and check your availability here - Claim a grant through the Self-Employment Income Support Scheme
Coronavirus Job Retention Scheme
This scheme was due to end on 31 October 2020 but has now been extended until 31 March 2021. HMRC will cover 80% of the salary of employees who would otherwise have been laid off during this crisis. This is subject to a cap of £2,500 per month.
To recap the rules:
- It was originally available to all employees on the payroll as at 19 March 2020. The extension is available to all employees on the payroll before midnight on 30 October 2020. This means that an RTI submission to HMRC on or before this date must have been made
- All UK businesses are eligible
- Once furloughed, an employee is not allowed to do any work for the business. Directors can be furloughed but other than statutory duties, they are not allowed to do any work for the company. This would include dealing with bookings/postponements and cancellations unfortunately. However, flexible furlough was introduced in July allowing employees to work part-time and to claim for the hours they didn't work
The furlough calculation is based on the higher of:
- same earnings for the corresponding month last year
- average monthly earnings from the 19/20 tax year
- The calculation above still applies to employees who had returned to work before being re-furloughed
The calculation for new employees on the payroll as at 30 October 2020 who are furloughing for the first time is based on:
- fixed salary - earnings in the last pay period ending on or before 30 October 2020
- varied pay - average earnings between the start date of their employment or 6 April 2020 (whichever is later) and the day before their furlough period begins
Job Retention Bonus
Employers were to have received a one-off bonus of £1,000 for every furloughed employee (including directors) who were continuously employed to the end of January 2021. Employees must have earned at least £520 per month (the National Insurance lower earnings limit) between 1 November 2020 and 31 January 2021 to be eligible.
The government have now announced that the Job Retention Bonus will not be paid in February 2021 and a retention incentive will be deployed at the appropriate time.
Job Support Scheme Open
The 'Open' scheme was originally for employers who have experienced a drop in business due to Covid-19. This has now been postponed due to the extension of the Coronavirus Job Retention Scheme.
Job Support Scheme Closed
The 'Closed' scheme was originally for employers who are legally required to close the business. This has now been postponed due to the extension of the Coronavirus Job Retention Scheme.
Bounce Back Loan Scheme (BBLS)
This loan has been extended to 31 January 2021.
This scheme allows banks to offer loans to all small businesses and the self-employed. The Government will provide lenders with a 100% guarantee on the value of the loan which opens this up to those of us who would be unable to get a loan under normal circumstances due to inadequate security. There will be no fees or interest to pay for the first 12 months then after this period the interest rate will be only 2.5% a year. Finance terms for the loan were initially up to 6 years but have now been extended to 10 years.
You can borrow between £2,000 and 25% of your business' turnover. The maximum loan amount is £50,000.
You can apply simply by contacting one of the 11 accredited lenders. It should take no longer than a standard application.
Most participating lenders have a dedicated page explaining the application process.
Please visit British Business Bank - Bounce Back Loan Scheme for full details.
Coronavirus Business Interruption Loan Scheme (CBILS)
This loan has also been extended to 31 January 2021.
If you want to borrow more than is permitted under the Bounce Back Loan Scheme (BBLS), then this can be a viable alternative.
The Government will provide lenders with an 80% guarantee on the value of the loan and will also cover the first 12 months of interest payments and any arrangement fees (although many lenders have said they'll waive these fees anyway). Unlike the Bounce Back Loan Scheme (BBLS), interest rates are set by the lender as opposed to the fixed 2.5% rate. Finance terms for the loan were initially up to 6 years but have now been extended to 10 years.
You can apply simply by contacting one of the 40+ accredited lenders. It should take no longer than a standard application.
There are a few eligibility restrictions but thankfully photographers are not amongst them. However, you must have a borrowing proposal which would have been considered viable by the lender before the current pandemic.
Most participating lenders have a dedicated page explaining the application process.
Please visit British Business Bank - Coronavirus Business Interruption Loan Scheme for full details.
Self assessment tax payments deferred
As previously announced, payments on account due to HMRC by 31 July 2020 have been deferred until 31 January 2021.
The government have announced a further additional 12 month extension meaning payments deferred from July 2020, and those due in January 2021, will now be able to be paid over a twelve month period up to January 2022. No announcement has been made about whether interest will be charged but as this will be under the existing 'Time to Pay' arrangement, it is likely that it will be.
VAT payments deferred
The government initially announced a 3 month VAT payment holiday from 20 March to 30 June.
The government have now announced that instead of paying the full amount by the end of March 2021, you can make smaller payments up to the end of March 2022, interest free.
UK banks are offering various relief measures to customers affected by coronavirus (this includes loss of income). The measures vary slightly from bank to bank but include repayment holidays on mortgages and loans of up to 3 months, increased credit card limits and the ability to withdraw funds from fixed savings accounts with no charges. I would recommend contacting your bank directly.
If you haven't already claimed a mortgage holiday, the initial closing date of 31 October 2020 has been extended. If you have already claimed, you can apply to extend this holiday by up to a further 3 months.
Local Restrictions Support Grant
Businesses who pay rates on their premises and are required to close in England for more than 3 weeks due to local or national restrictions will be eligible for the following:
- Grants of £1,334 per month for properties with a rateable value of £15,000 or under
- Grants of £2,000 per month for properties with a rateable value of between £15,000 and £51,000
- Grants of £3,000 per month for properties with a rateable value of between £51,000 or over
You'll need to contact your local council for application details. If you don't pay rates, see below for discretionary funding.
Similar grants are available in Scotland, Wales and Northern Ireland. Contact your local council for more information.
You may receive a grant of up to £1,500 at the discretion of your local council if:
- Your business is required to close but you do not pay business rates
- If your business is not required to close but has been severely affected
Your local council will publish details of discretionary funding on their website.
Business rates holiday
For those of you who pay business rates, these have been scrapped for 12 months from 1 April 2020. You'll need to get in touch with your local authority if you haven't already done so.
Grant of up to £25,000
If you pay business rates and operate from premises with a rateable value between £15,000 and £51,000, then you are eligible for a non-repayable, taxable grant of up to £25,000. You should have been contacted by your local authority.
£10,000 cash grant
If you would usually pay business rates, but you're claiming either 'Small business rate relief' or 'Rural rate relief', then you are eligible for a non-repayable, taxable £10,000 cash grant. You should have been contacted by your local authority.
Statutory Sick Pay (SSP)
If you employ staff who are off sick due to coronavirus (either illness or staying at home on government advice), the government will refund up to 14 days of SSP. This will be available from day one as opposed to day four.
Employment and Support Allowance (ESA)
For the self-employed, if you're unable to work due to coronavirus (either illness or staying at home on government advice), and you don't have savings or investments worth over £16,000, you can claim up to £73.10 per week from day one. If you're in receipt of Working Tax Credits, you will still be eligible. To claim, simply go to this page and download the form. You won't need to attend an interview but it may be worth calling the number on the gov.uk page to clarify the sitation.
This benefit is available if you're on a low income (employed or self-employed) and neither you nor your partner have savings or investments worth over £16,000.
It is often quite complex to work out the exact amount you can claim but Citizens Advice have a national phone line providing help and advice with your claim. You can also check out the benefits calculator link below.
There are a number of benefits available for both the employed and the self-employed. As your personal circumstances are unique, it would be impossible to list them all. Here's a really useful link - https://www.gov.uk/benefits-calculators - which should help you find out what benefits you could get and how to claim them. If you need any information from us, please get in touch.
I will do my best to update this page as soon as anything changes but I hope you find it helpful.
Stay safe everyone.