Last Updated: 27/03/2020
The outbreak of coronavirus COVID 19 is having a significant impact on self-employed people across Derby, Nottingham and the wider United Kingdom.
The UK Government has announced some measures to support the self-employed at this time. You can find a list of support that is currently available below, with links to official government resources.
We expect further initiatives for self-employed people in due course and will update this post as and when new measures are announced. Please check back to stay up to date with all the options available to you.
In this post:
- Self-employment Income Support Scheme
- Deferral of Income Tax payments
- Sick pay for the self-employed
- HMRC Time To Pay service
- IR35 Off-Payroll Tax Delayed
- Support for the self-employed in Derbyshire and Nottingham
- Further support
On 26th March, the Chancellor announced a scheme that will allow those who are self-employed to claim a tax grant worth 80% of their trading profits up to a maximum of £2500 per month for at least the next 3 months.
You can apply if you meet the following criteria:
- You have traded in the 2019-20 tax year
- You have submitted your tax return for 2018-19
- You are currently trading when you apply or would be if not for COVID-19 and intend to continue trading in 2020-21
- Have lost profits due to COVID-19
Your profits must also be less than £50,000 and half of your income must be from self-employment. This is determined by:
- Having trading profits in 2018-19 of less than £50,000 and these profits make up more than half of your total taxable income
- OR by averaging trading profits form 2016-17, 2017-18 and 2018-19 of less than £50,000 and these profits make up more than half of your taxable income
If you started trading between 2016-19 HMRC will only use those years in which a tax return was filed. If you missed the 31st January 2020 deadline for filing your 2018-19 tax return you must submit this by April 2020.
How to apply
You cannot apply for the scheme yet. If you are eligible you will be contacted by HMRC and invited to apply online. Once you have been able to apply and got confirmation that you are eligible, HMRC will contact you to tell you how much you will get and get you payment details.
It is important to note that there are a lot of scammers trying to take advantage of people affected by COVID-19. You will only be able to access the scheme through the official gov.uk site. Any calls, texts or emails you receive saying you can receive financial help or are owed money, asked to click on a link or give sensitive information is probably a scam. If you are unsure you can see examples of scams and what you should do here.
What if I’m a company director?
Company directors are not classed as self-employed by HMRC therefore this scheme does not appear to cover them. The government has said they may be eligible to use the coronavirus job retention scheme. Please visit our page on Coronavirus support for small businesses for more information.
Income tax payments that were due on 31st July (2nd payment on account) will now be deferred to 31 January 2021. During this deferral period, no penalties or interest will be charged.
You do not need to do anything to take advantage of this as it will to automatically be applied.
Self-employed people who are affected by COVID-19 can now access full universal credits at a rate that’s equivalent to statutory sick pay for employees. This equates to £94.25 per week for up to 28 weeks.
A helpline has been launched by HMRC for self-employed people with concerns about paying tax due to COVID-19. Cases will be assessed on an individual basis and penalties may be waived along with any interest rates. You can reach the dedicate helpline on 0800 0159 559
IR35 Off-Payroll Tax Delayed
There has been a delay to the tax reform of the IR35 legislation affecting contractors. This has now been delayed until April 2021. You can read more about IR35 here.
Support for the self-employed in Derbyshire and Nottingham
Derbyshire County Council are providing an emergency relief fund for businesses with nine or fewer employees and sole traders. In these cases, you are able to apply online for £500 in emergency support. Self-employed people will need to be registered in Derbyshire and must be able to show evidence of a loss of income due to COVID19. To apply, you should visit the Derbyshire County Council website.
Nottingham-based self employed workers may be eligible for help and support from Nottingham City Council. Please check the website for more details.
We realise that this is a challenging time for self-employed workers, and that many are evaluating all their options. If you would like to discuss your options with our team, please get in touch and we may be able to help.
This is an evolving situation, so please check back for further updates on any support packages as they are announced.