SUPPORT SCHEMES – TIME FOR AN UPDATE
IN last month’s blog post we introduced the support measures that are in place to try and assist businesses, employees and self-employees through the challenges of Covid-19. Like much in our new everyday world, the situation with these support schemes is swiftly evolving. Therefore, this seems like the right time to supply an update on the measures that are available.
Covid-19 Self-Employed Income Support Scheme
Under this scheme, self-employed workers are able to claim a taxable grant based on an average of their earnings over the past three years. In recent weeks HMRC has been contacting all eligible self- employed individuals, inviting them to apply for the grant online. Eligible customers have been given a date from when they can claim, starting from May 13. To be eligible, workers must have filed all relevant income tax self-assessment returns, have traded in the 2018/19 and 2019/20 tax years and intend to continue trading through the 2020/21 tax year. Trading profits, based on an average of the last three years, must be no more than £50,000.00 and at least equal to any non-trading income, such as PAYE employment income, company dividends, pension income and property rental income. The grant will be 80% of your average monthly trading profits. Payments are scheduled to start in late May and have been designed to cover a three-month period, although the scheme may be extended if necessary.
Covid-19 Job Retention Scheme
The Government’s Job Retention Scheme went live for applications on May 20. It allows businesses to furlough their employees, with the Government paying 80% of their wages, up to a maximum of £2,500.00. In the first week of the scheme’s operation, there were applications from over 430,000 employers, covering over three million employees. This scheme is open for five months and was backdated to the March 1, 2020, until the end of July. On the May 12 it was announced that the scheme would be further extended until the end of October 2020. However, from August 1 will see greater flexibility, enabling employers to bring back their furloughed employees to work part-time and contribute to paying their wages whilst still receiving support from the scheme.
Covid-19 Bounce Back Loan Scheme
This loan scheme has been designed to enable smaller businesses to access finance more quickly during the Covid-19 outbreak. It allows businesses to borrow between £2,000.00 and up to 25% of their turnover, up to a maximum of £50,000.00, with the Government guaranteeing 100% of the advance. The loan is repayable over six years, although businesses can repay early without incurring a fee or penalty. No repayments will be due within the first 12 months of receiving the loan. To be eligible, your business must be based in the UK and have been established prior to the March 1, 2020.
Government support-finding tool
The UK Government has launched an online platform to help businesses assess the financial support that may be available to them during the current Covid-19 crisis. The tool will guide businesses through a range of loans, tax reliefs and grants, all designed to assist businesses through the extremely difficult economic effects of the current pandemic. The tool will ask businesses to complete a short questionnaire regarding location, number of employees and turnover and then directs them to a list of financial support packages that they may be eligible for.
CGT report deadline extended
HMRC has confirmed it will not charge penalties for the late reporting of capital gains tax (CGT) on disposals of UK residential property made by July 31, 2020. On April 6 changes were made so that if a UK resident sells a residential property in the UK, they have 30 days to tell HMRC and pay any money owed. The seller must submit a standalone tax return covering the CGT, which can no longer be included as part of the existing self-assessment tax return. Failure to notify HMRC about any CGT within 30 days of completion may incur a penalty, as well as interest on the sum owed.
If anybody requires further information about the contents of this post, please don’t hesitate to contact Black Type Accountancy via email or calling the office.
