Advice for Freelancers during Covid-19

Financial Support

UPDATE - 9th July 2020

Click here to see notes from the Furlough Scheme and SEISS update webinar with Tony Lennon (Bectu official)

Tax forbearance

o Self-assessment payment on account deferred from July 31st 2020 to January 31st 2021

o VAT deferral for quarters ending in April, May, June – CANCEL DIRECT DEBIT!

o IR35 intermediary changes in private sector deferred until April 2021

o Time to Pay scheme is phased payment plan

o Budget Payment Plan is based on making payments on anticipated earnings

o HMRC 0300 200 3822 to see what help you can get

o Unlawful trading rules suspended in the case of insolvency for your limited company, strict fiduciary terms relaxed

· PAYE employee

o Job retention scheme part 2 closes 31st October

o Employees still on 80% but gradually employers can claim less for furlough and the employer will need to make up the shortfall:

July – 80% plus NIC and pension from the Government

August – 80% from Government

September – 70% from Government

October – 60% from Government

· PAYE employee after October 31st

o Employee can recieve an unfurloughing bonus £1,000

§ Employee must earn average minimum of £520 month in Nov, Dec, Jan

· Self-employed sole trader - Self-employment Income Support Scheme Part 2

o Self-assessment for 2018-2019 must be filed

o Affected by Covid-19 on or after 14th July

o Eligible if SE ‘profit’ less than £50K

o SE income must be 50% + taxable earnings

o 70% grant based on average over 3 years

o Max grant £6,570 over three months (reduced from phase 1)

o Second payment of 3 months

o Invitation to apply from HMRC opens 17th August

o Closes 19th October (Did not need to have applied previously)

· Working through a Limited company

o Bounce Back Loan Scheme is still main option if you cannot furlough yourself

o Online application from May 4 2020

o Closes 4th November 2020

Employed or not do remember Universal Credit

BECTU are still working on the Treasury as many self-employed members locked out of the government support scheme

£1.57bn support for culture and arts is still unclear if it is for institutions or the workers

Furlough, Coronovirus Job Retention Scheme (CJRS)

  • PAYE employees can ask to be furloughed. They need to have applied for this by 10th March.

  • The original furlough dates were March through to May. However, the government has extended this to October.

  • The scheme closed to new applications on June 10th.

  • The condition of the original furlough meant the employee could not work at all. The government pays 80% of their wages up to the value of £2,500 a month.

  • If you are a limited company you can furlough yourself through this scheme as long as you fulfil the criteria set out in the T & C’s.

  • However, after August employers must contribute to the cost of paying salaries. Terms TBD.

  • Full terms and conditions on the website. https://www.gov.uk/guidance/claim-for-wages-through-the-coronavirus-job-retention-scheme

Self Employed Income Support Scheme (SEISS)

  • The SEISS scheme is aimed at the self-employed and those in partnerships who have been adversely affected by Covid 19. It provides a grant of 80% of average monthly trading profits calculated over the three tax years up to 2018/19.

  • It is capped at £2,500 per month and accounts for the three months from March to May 2020.

  • It will be paid in a single installment, capped at £7,500. Payments will be made from late May onwards.

  • If you are eligible and want to claim the first grant you must make your claim before 13th July 2020 and have earnings under £50k.

  • The scheme is being extended and you will be able to make a claim for a second and final grant in August 2020.

  • If you receive the grant you can continue to work and it does not need to be repaid, but is subject to income tax and self-employed NI.

  • Full terms and conditions on the website. https://www.gov.uk/guidance/claim-a-grant-through-the-coronavirus-covid-19-self-employment-income-support-scheme

Bounce Back Loan Scheme

  • The scheme helps small and medium-sized businesses to borrow between £2,000 and upto 25% of their turnover.

  • The maximum loan is £50,000.

  • The government guarantees 100% of the loan and there won’t be any fees and interest to pay for the first 12 months. After 12 months the interest rate will be 2.5% a year.

  • Full terms and conditions on the website. https://www.gov.uk/guidance/apply-for-a-coronavirus-bounce-back-loan

Coronavirus Business Interruption Loan Scheme

  • There are over 50 lenders participating in the scheme including all main retail banks. You should approach the lender through their website. We have had some success stories and others who have had difficulties. It seems if you already have a business account with a particular bank it is a much easier process and can be done online relatively quickly.

  • Full terms and conditions on the website, but each lender will have its own T & C’s. https://www.gov.uk/guidance/apply-for-the-coronavirus-business-interruption-loan-scheme

Self Employed and Universal Credit

  • You will need to provide information about your earnings. E.g. how much Tax and NI paid.

  • How much on different types of expenses

  • Any money paid into a pension

  • If you are both self-employed and employed your universal credit payment will be calculated based on your combined earnings from self-employment and employment.

  • You and your partner must have less than £16,000 in savings between you (should the savings be for payment of tax this can be taken into consideration at the discretion of the person interviewing you). We have had members be given some leeway and others not.

  • Full terms and conditions on the website. https://www.gov.uk/universal-credit/eligibility

Job Seekers Allowance

  • You may be able to claim for this and universal credit.

Mortgage Payment Holiday

Council Tax Covid 19 Hardship Fund 2020 to 2021

  • Some of our members have been able to get a reduction on their council tax up to 80%. Some boroughs are simply not chasing for outstanding payments for the time being.

  • Each local authority will have been given a government grant to assist the most vulnerable individuals and households. Please contact your own local authority for details.

  • Some general information is to be found on the link below. https://www.gov.uk/government/publications/council-tax-covid-19-hardship-fund-2020-to-2021-guidance

Renters during Covid 19

Defer Tax Payments without Penalty due to Covid 19

    • Delay VAT due before 30 June 2020 until 31 March 2021

The recommendation is to cancel your direct debit as they will still try to take it when you submit your return.

Not eligible for any of the schemes listed above?

    • Bectu are still trying to get assistance to all those who have fallen through the cracks, especially small limited companies and sole traders. They are lobbying for them and there are various ongoing campaigns to raise awareness. https://petition.parliament.uk/petitions/310515