The self employed community have been seriously affected by the outbreak of Coronavirus, and we’re sending our very best wishes to everyone. 

With the government’s new and very generous self-employed support package, we hope that all of you will benefit. Although overwhelming, the good thing is that there are many schemes available to you that you could be eligible for.

However, with these new schemes it is complicated and difficult to know exactly what you’re eligible for and what you need to prove it. As well, a set & standard monthly income for the self-employed is just not a thing - so knowing how much you’ll actually receive from the government’s 80% grant is hard to work out.

Not to worry, We’ve broken down all of the government’s new initiatives based upon situation & eligibility, so that you know exactly what you're entitled to receive and how to get it!

We’ve split this post into two sections - first is for our sole traders - and the second half is for everyone with a limited company who employs themselves.

Sole Traders

1. The Self-employment Income Support Scheme (SEISS) 

This scheme will be the most commonly used for sole traders, and has been referred to the most in the press. This scheme will provide a grant to you that is worth 80% of your profits, capped at £2,500 a month. 

To calculate the amount of the grant, the government will use the average profits declared in your self assessment tax returns from 2016-17, 2017-18 and 2018-19. 

You can make your first claim by the beginning of June and receive your money then, and the SEISS will be open for 3 months initially, and is subject to extension upon review. As well, payments will be backdated to the 1st of March.

Am I eligible & how can I prove it?

1. You have to be self-employed or a member of a partnership:

• The government is asking that you have to have traded in 2019-20, be trading at the point of application & intend to trade in the next tax year 2020-21
• To prove this, they require a tax return for the financial year 2018-2019 (the deadline for this was in January 2020). If you have not filed this return, they are giving you an additional 4 weeks from the 26th of March to complete this. Follow this link here to fill out your tax return

2. You have to have trading profits less than £50,000 & more than 50% of your total annual income comes from self-employment:

• This can be proven by the trading profits and total income in your 2018-19 tax return
• It can also be proven by the average of your trading profits and total income across the three financial years - 2016-17, 2017-18 and 2018-19

How & when can I access the grant?

HMRC will get in contact if you are eligible for the scheme and invite you to apply online. ONLY access this scheme through GOV.UK so be wary of scammers that claim they’re from HMRC and ask you to give your information over the phone, or by clicking a text link. 

This is quite a substantial amount of work for HMRC, which means that grants will be paid out by the beginning of June 2020. If you need the further 4 weeks to submit your tax return for 2018-19 to become eligible, it will take HMRC a few more weeks to get in touch with you to invite you to apply, and you might get your grant a few weeks/ months later.

For more information, click here. 

What support can I get in the meantime?

June is a long way away for many, and the government completely understands this. In the meantime, if you are eligible you can apply for Universal Credit and/or Business Loans.

2. Universal Credit

Despite the small headline numbers of £94 a week, and 70,000th in the queue, applying for Universal Credit IS a good idea! Although it has been highlighted that this scheme will not cover all your outgoings, it is worth taking an hour or so out to apply to get some support whilst you wait for your SEISS grant in June.

Am I eligible & how can I prove it?

1. You’re on a low income or out of work:

• This applies to everyone given the current climate
• All work/ jobs taken by yourself are considered for Universal Credit. And, you will need to provide reports on your earnings at the end of each monthly assessment period 
• To provide evidence of your earnings you can use:
  -Tax returns, accounts and Unique Taxpayer Reference (UTR) 
  -Customer & supplier lists, recipients and invoices
  -Marketing materials 

2. You live in the UK, are over 18 and under the State Pension age.

3. You have savings of less than £16,000:

• This includes the cumulative savings of both yourself and partner. To find out what counts towards your savings, click here

How much will I be paid?

There is no set figure applied to everyone, as this is worked out on your individual circumstances. You may find more information here or also use this benefit calculator here.

There is no set figure applied to everyone, it is worked out on your individual circumstances.Your Universal

3. Self- Assessment & Tax Deferral and HMRC Time to Pay Scheme

The second self-assessment payment on the 31st July may be deferred until 31 January 2021. All sole traders and companies are eligible for this deferment, and you do not need to apply. 

HMRC’s Time to Pay scheme is government support if you’ve missed a tax payment, or think you will miss your next payment due to Coronavirus. The support is based on a case-by-case basis taking into account your individual situation. If you need some help and want to access the scheme, just call this number 0800 0159 559.

Limited Companies

It’s difficult to know exactly what you’re eligible for if you’re self employed with your own limited company. We’ve split this section up into two, firstly explaining schemes where all limited companies are eligible to apply for, followed by grants & loans for small and medium sized (SME) businesses.

These first four initiatives are available to all limited companies.

1. Coronavirus Job Retention Scheme

If you cannot work at all you will effectively have to furlough yourself. This means that if draw an income from your company via a PAYE scheme, you can keep yourself on the payroll and HMRC will reimburse 80% of your wages, capped at £2,500 per month.

Am I eligible & how can I prove it?

You have to be a furloughed worker

• HMRC will get in contact with how to submit information about your employees that have been furloughed, including their earnings
• HMRC is setting up a new system is to allow payments to employers as well so hold on

2. Deferring VAT and Income Tax payments

VAT payments have been deferred for 3 months. You will still need to collect the VAT paperwork and submit your return, but you will not need to pay it. You do not need to apply for this scheme, it is available for all companies.

3. The HMRC Time To Pay Scheme

This scheme is a type of government support if you’ve missed a tax payment, or think you will miss your next payment due to Coronavirus. The support is based on a case-by-case basis taking into account your individual situation. If you need some help and want to access the scheme, just call this number 0800 0159 559.

There are additional schemes - grants and loans - available for small and medium businesses:

4. Small Business Grant Scheme funding, for those with SBRR/ RRR

This scheme is for local authorities to support smaller businesses that pay little or no business rates. This is a one-off grant of £10,000 for companies who receive Small Business Rate Relief or Rural Rate Relief, to help them with business outgoings.

Am I eligible & how can I prove it?

You have to receive SBRR and/or RRR:

• Your local authority will already know whether you receive this, and therefore will write to you to let you know if you’re eligible for the grant
• Your business will therefore have to be based in England & occupy property for the local authority to get in touch

5. The Coronavirus Business Interruption Loan Scheme

This scheme will support small and medium sized businesses (SMEs), offering loans, overdrafts and finances up to £5 million from the British Business Bank. All major banks are offering this scheme

To make it more beneficial for smaller businesses, the government will make a Business Interruption Payment that covers the first 12 months of interest payments & fees. This means for smaller businesses there will be no upfront costs and lower initial repayments.

Am I eligible & how can I prove it?

Your company has a turnover of less than £45 million & meets the British Business Bank eligibility criteria:

• You will need to apply through one of the 40 finance providers, who have different application processes. Each will have different parameters on how to declare your profits & prove your eligibility
• Here is more information on eligibility and for the full rules of the scheme visit here

We understand that this is a lot of information to get around, but we want to give whatever help we can to make these applications as stress-free for you as possible in these uncertain times. 

How Can Penfold Help You?

Penfold is the pension built for the self-employed.  When you work for yourself, you don’t have a HR team to sort out your pension, but Penfold makes it easy & simple. It takes just 5 minutes to set up, online or on the app! It’s completely flexible & perfect for sole traders, contractors, or limited company directors.

You can sign up here!

As always, please feel free to get in touch with us on our online chat, or email us here if you’ve got any questions about what you think you’re eligible for or any other questions.