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Support for the self employed

On Thursday 24 September 2020 the Chancellor of the Exchequer Rishi Sunak presented the Winter Economy Plan to Parliament.

The summary below is based on what we know at 25/09/20

https://www.gov.uk/government/topical-events/winter-economic-plan 

 

Extension to the Self-Employed Income Support Scheme (SEISS)

How long does it last for?

The scheme will last for 6 months, from November 2020 to April 2021. 

What will I get?

The extension will be in the form of two taxable grants. 

The first grant will cover a three-month period from the start of November until the end of January. This initial grant will cover 20%of average monthly trading profits, paid out in a single instalment covering 3 months’ worth of profits, and capped at £1,875 in total. 

The second grant will cover a three-month period from the start of February until the end of April. The government will review the level of the second grant and set this in due course.

Am I eligible?

To be eligible for the scheme, self-employed individuals, including members of partnerships, must meet the following criteria: 

  • Currently be eligible for the SEISS (although they do not have to have claimed the previous grants)
  • Declare that they are currently actively trading and intend to continue to trade 
  • Declare that they are impacted by reduced demand due to COVID-19 in the qualifying period. The qualifying period for the first grant is between 1 November and the date of claim

Do I have to pay Tax and NI on the grants?

Yes. The grants are subject to Income Tax and National Insurance Contributions.

How can I claim?

Details have not yet been published. It is expected that claims for the new rounds of grant will be made through the same HMRC portal as previous grants but HMRC will provide full details about claims and applications in due course.

 

Enhanced Time to Pay for Self-Assessment taxpayers 

The government will give the self-employed more time to pay taxes due in January 2021. 

HMRC previously announced that if you were due to pay your second self-assessment payment on account on 31 July you could defer this until 31 January 2021. No penalties or interest for late payment would be charged if you defer payment until January 2021.

The Government has announced that it will extend this 31 January 2021 deadline for Taxpayers with up to £30,000 of Self-Assessment liabilities due. These tax payers will be able to use HMRC’s self-service Time to Pay facility to secure a plan to pay over an additional 12 months. 

This means that Self-Assessment liabilities due in July 2020 will not need to be paid in full until January 2022. Any Self-Assessment taxpayer not able to pay their tax bill on time, including those who cannot use the online service, can continue to use HMRC’s Time to Pay Self-Assessment helpline to agree a payment plan.