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Tuesday, August 16, 2022

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Government plans for Self employed during the Corona Crisis

Job Retention Scheme & furloughing staff
  • We are waiting for official confirmation from HMRC, that directors, even sole directors, can be furloughed under the Job Retention Scheme for their PAYE element. It will probably mean that all employees will need to furloughed too and will allow directors to continue with their statutory duties such as filing VAT Returns. Directors are likely to be also asked to stop all revenue-generating work such as speaking to clients and working on future projects if they are to furlough themselves.
  • Self-employed individuals i.e. sole traders can carry on working on their trade, and still take the grant.  There is a requirement that the business has to be expecting to lose profits as a result of the virus, to be able to claim this grant, but I suppose most businesses, and HMRC, won’t actually know if that is the case until next year’s tax return.  So there may eventually be a reclaim option by HMRC. We also think that self-employed can also take on other PAYE work during this time.
  • There is now clarity that employees who have been furloughed can then be made redundant subsequently, even during the furlough period.  Minimum furlough period is 3 weeks
  • Employees who have been furloughed have the option to take on other temporary work.
Rates grants
  • We have heard that tenants of coworking office spaces such as WorkLife could be eligible for Small Business Grant Fund. If the office space provider included your business on the rates listing as at 11th March you may be eligible for the £10k grant.
Business Interruption Loan Scheme

  • It has been confirmed that CBILS lenders’ fees will also be paid by the government as well as 12 months interest.  Some are offering capital repayment holidays too, so potentially there are no cash outlays for these loans at all for the initial period.

  • There are a number of other lenders who are still in the process of applying for CBILS accreditation, (Funding Circle, Market Finance, etc) but it appears to be taking some time.  If these fintech’s obtain that accreditation, it could be a ‘game changer’ due to the speed they can turn deals around, but it is to be noted they will most likely ask for personal guarantees for all loans, even those below  £250k.
Tax Deferrals

  • HMRC are being very supportive with PAYE/NIC tax deferrals, even up to July.  It is expected that there will be an automatic deferral announced soon just like VAT and then phone calls won’t need to be made. However, if you have a larger employee base, please do get in touch as it will still be best to make that call to HMRC now and get that agreement.

  • It is also rumoured that HMRC will be supportive with 12 to 18 month time to pay agreements in due course, which will need to be supported by cash flow statements. If you do not have a cash flow statement set up please get in touch as it is now imperative to check the status of your business as well as being able to apply for the schemes.
Keep up to date with all the information on our resource hub here, which is being updated daily with any new information as and when it is released.

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