Coronavirus - All the information you need if you're self-employed, plus be aware of scammers

After much pressure, the Chancellor has just announced support for 95% of the five million self-employed workers in the UK, adding to the financial support that has already been made available in other areas of personal finance. Today's update is specifically aimed at our clients who are self-employed.

RISHI SUNAK'S ANNOUNCEMENT TODAY

"You have not been forgotten, we will not leave you behind and we all stand together" - The Chancellor's reassuring words for self-employed workers at the end of his speech announcing an almost parallel support package to PAYE workers last Friday. The gist of this unprecedented support includes:

  • A taxable grant of up to 80% of average earnings for workers with up to £50,000 trading profit
  • there will be a cap of £2,500 per month for 3 months
  • there will be a rigorous process to eliminate any fraudulent opportunists including application forms to be completed and a review of the most recent three years' annual returns
  • for those that have still not submitted their return for the last tax year, the Chancellor has extended the deadline without penalty to allow them to be able to benefit from this support package
  • the grant will be paid it is hoped from 1st June 2020 which will be a lump sum for the 3 months' from 1st March.

 For those needing to access cash before then, the Government has made numerous other support available which we have detailed for our clients below. 

Click here to claim the Gov.uk breakdown of Rishi Sunak's self-employed support


MORTGAGE SUPPORT

Banks including HSBC, NatWest and Lloyds have put measures in place to support customers with mortgage payments in a number of ways. We spoke to HSBC who informed us of their process which includes an initial telephone conversation to ask how you've been affected by Coronavirus, and if you take the 3 month mortgage holiday, they have assured your credit score and future borrowings will not be affected. A follow up call within 5-7 days will explain how the break will work.

Employees in the Financial Sector have been identified as Key Workers by the Government and the team at Mortgages Made Simple are available to discuss any options or concerns you may have about your mortgage or protection insurances. You can contact them on 01925 357 060 or email info@mortgagesmadesimple.me.uk.

Banks are also offering to move to a low rate fixed mortgage if you're currently on a tracker which might be worth considering.

Take a look at this article on MoneySavingExpert.com


RENT PROTECTION

There has been a complete ban on evictions and no tenant in either social or private accommodation will be forced out of their home during this difficult time. Furthermore, local housing allowance will be increased to cover a minimum 30% of market rents.

Emergency legislation will be taken forward as an urgent priority so that landlords will not be able to start proceedings to evict tenants for at least a three-month period. As a result of these measures, no tenants in private or social accommodation needs to be concerned about the threat of eviction.

Recognising the additional pressures that Covid-19 may put on landlords, the three month mortgage payment holiday mentioned above will be extended to landlords whose tenants are experiencing financial difficulties which will alleviate the pressure on landlords, who will be concerned about meeting mortgage payments themselves, and will mean no unnecessary pressure is put on their tenants as a result.

At the end of this period, landlords and tenants will be expected to work together to establish an affordable repayment plan, taking into account tenants’ individual circumstances.

Read more on the Gov.uk website here


BAN ON COMMERCIAL EVICTIONS

HMRC has announced that commercial tenants that cannot pay their rent due to coronavirus will be given extra protection from eviction by landlords. Whilst conversations are already taking place about voluntary arrangements and payments, this latest announcement comes as the Government closes more businesses to prevent social contact, thus slowing down cashflow. If you're self-employed and you rent an office, this may offer some respite.

Click here for the Gov.uk information on protection for commercial tenants


UNIVERSAL CREDIT

Universal Credit has been increased at the standard level by £1,000 per year for the next 12 months and self-employed workers affected by Coronavirus will benefit from Universal Credit at a rate equivalent to Statutory Sick Pay. There has been an overwhelming increase in the number of people claming Universal Credit so please be wary of long wait times on the phone and online.

Click here for self-employed Universal Credit information


BANK LOANS & BUSINESS INTERRUPTION LOAN SCHEME

The Bank of England has cut interest rates to 0.1%, and banks have announced they will be relaxing requirements for overdraft extensions and loans applications. Whilst the UK is on lockdown, banks remain open, so, if you need to apply for a loan, please speak to your local branch or business bank manager.

Did you know that the Business Interruption Loan Scheme is available for self-employed workers as well? As long as you have a business bank account, an annual turnover of up to £45m and generate more than 50% of your turnover from trading activity you can apply under the scheme. There are some restrictions in place - please click the link below to find out more.

At LWA, we are assisting clients with cash flow forecasts for loan funding. For clients on Xero we can use Futrli to speed up the process from days into hours. If you would like cash flow forecasting support to assist your loan applications, please contact matt@lwaltd.com or call 0161 905 1801.

Apply for the Business Interruption Loan Scheme here


GRANTS FOR BUSINESSES THAT PAY LITTLE OR NO BUSINESS RATES

Many self-employed workers in England that occupy property and already qualify for Small Business Rate Relief or Rural Rate Relief will benefit from a new Small Business Grant Scheme providing funding of £10,000. This will be made available via local councils for small businesses and if you are eligible, your local council will contact you in due course. To find your local council to direct any enquiries, please click the link below.

Whilst local councils will be sending letters about grants if applicable to your business, they understand that you might not be able to access the office to which they will be sent. Trafford Council have made the letter templates and online grant applications available here for those that are eligible.

Find your local council information here


DEFERRED VAT & TAX PAYMENTS

Rishi Sunak has also confirmed a deferment of the current VAT quarterly payment to the end of June, and any VAT incurred during this period will not be payable till the end of the current financial year.

HMRC has a set up a telephone helpline on 0800 0159 559 to support businesses and self-employed people concerned about not being able to pay their tax due to Coronavirus. HMRC will discuss your specific circumstances to explore agreeing an instalment arrangement; suspending debt collection proceedings; cancelling penalties and interest where you have administrative difficulties contacting or paying HMRC immediately.

HMRC help for tax payments


COUNCIL TAX SUPPORT FOR VULNERABLE FAMILIES

As part of the response to Covid-19 and the affect on lives, the Government announced the provision of a £500m hardship fund, supporting vulnerable people and household within in local councils. You can view the Government guidance to local authorities by clicking below.

Council Tax guidance document


SCAM AWARENESS

As a final note, we would like to make you aware of numerous scams that are on the rise with opportunists trying to cause panic whilst taking money from vulnerable people. This includes:

  • Texts that appear to be from HMRC, warning of a £30 fine for being seen outside numerous times.
  • Calls, emails and texts claiming to be from HMRC using lockdown as a reason to make card payments over the phone.
  • Aside from taking payments, there are bogus 'coronavirus home testers' knocking on doors - the UK is on lockdown and people should not be out / visiting. Please do not open your door unless you're expecting a delivery or a visit from a carer / support worker if you have been acknowledged as a vulnerable person in relation to COVID-19.

You can report HMRC scams here


SELF EMPLOYMENT INCOME SUPPORT SCHEME

Since last Thursday's announcement from the Chancellor specifically aimed at self employed workers, a link has been issued that can now be used to claim support, however as stated, funds won't be availble until 1st June at the earliest.


WE'RE HERE TO HELP IF YOU'RE SELF-EMPLOYED
If you're self-employed, we hope the above information is useful, and that you can feel some respite for your income protection and financial security affected by Coronavirus. If you have any specific concerns, please feel free to contact a member of our team on 0161 905 1801 in Manchester, or 01925 830 830 in Warrington. You can access all our previous updates here, and please feel free to share this blog with anyone that you feel might benefit.

Wishing you and your family all the very best at this time.