COVID-19 – UK support measures update

Mar 30, 2020

The UK Government announced the details of its new self-employment income support scheme last week. However, the first payments won’t be made under the scheme until the beginning of June 2020. We will continue to engage with HMRC on members behalf in respect of this scheme and other business and employer supports in relation to COVID-19 and will share the most up to date information with members as it becomes available.

HMRC has changed the dedicated phone number for the coronavirus helpline targeted at businesses and the self-employed to 0800 024 1222. All calls to the original 0300 number will be redirected to the new helpline. Opening hours for the helpline are 8am to 4pm Monday to Friday.

HMRC has also temporarily changed the way it deals with stamp duty payments on shares bought on a stock transfer form, and will no longer accept cheques. Stamp duty must now be paid electronically only by Faster Payment, Bacs or CHAPs. Details of the transaction must be emailed to HMRC rather than sent in the post. Any payments sent as a cheque will not be banked until coronavirus measures end, meaning that the transaction will not be processed.

Further information was also provided last week in respect of the job retention scheme:- 

What is it?

The Self-employment Income Support Scheme (“SEISS”) will support self-employed individuals (including members of partnerships) whose income has been negatively impacted by COVID-19. The scheme will provide a grant to self-employed individuals or partnerships, worth 80% of their profits up to a cap of £2,500 per month.

HMRC will use the average profits from tax returns in 2016-17, 2017-18 and 2018-19 to calculate the size of the grant. The scheme will be open to those where the majority of their income comes from self-employment and who have profits of less than £50,000. The scheme will be open for an initial three months with people able to make their first claim by the beginning of June.

Who is eligible?

To be eligible for the scheme the taxpayer must meet all the criteria below:

  • Be self-employed or a member of partnership;
  • Have lost trading/partnership trading profits due to COVID-19;
  • File a tax return for 2018-19 as self-employed or a member of a trading partnership (those who have not yet filed for 2018-19 will have an additional 4 weeks from this announcement to do so);
  • Have traded in 2019-20; be currently trading at the point of application (or would be except for COVID 19) and intend to continue to trade in the tax year 2020 to 2021; and
  • Have trading profits of less than £50,000 and more than half of total income comes from self-employment. 

This can be with reference to at least one of the following conditions:

  • Trading profits and total income in 2018/19
  • Average trading profits and total income across up to the three years between 2016-17, 2017-18, and 2018-19.

How is the scheme accessed?

Individuals should not contact HMRC now. HMRC will use existing information to check potential eligibility and invite applications once the scheme is operational. HMRC will then pay the grant directly to eligible claimants’ bank account.

HMRC is urgently working to deliver the scheme; grants are expected to start to be paid out by beginning of June 2020. For eligible individuals who have not submitted their returns for 2018-19, they will have 4 weeks’ notice from the date of the announcement to file their returns and therefore become eligible for this scheme.

When can the scheme be accessed?

HMRC is urgently working to deliver the scheme; grants are expected to start to be paid by the beginning of June 2020. According to HMRC, this time is necessary to ensure that the scheme is both deliverable and fair. In the interim the self-employed will still able eligible for other government support including universal credit and business continuity loans. For self-employed businesses which employ workers, the coronavirus job retention scheme may also apply.