Covid-19 financial support measures available to the self-employed operating across the island of Ireland are continually updated by the UK and Ireland governments. To make it easier for you to check what you are currently entitled to (north or south), we asked business advisers, PKF-FPM, to put all the latest support measures information in one place for you to access. Read on…
The UK Government announced a critical package of support to protect the jobs of self-employed workers across the UK as a result of the Coronavirus pandemic.
Self-Employment Income Support Scheme (SEISS)
The scheme’s first grant provided a taxable cash grant of 80% of an individual’s average monthly profits over the last three years of up to £2,500 per month and the second grant provided for 70% an individual’s average monthly profits over the last three years of up to £2,190 per month.
While the final date for applying for both the first and second SEISS grants has now passed, the government announced a further extension in the form of an additional two grants, each available for the periods covering November 2020 to January 2021, and February 2021 to April 2021. Grants will be paid in two lump sum instalments, each covering a three-month period.
To be eligible for this extended support, self-employed individuals, including members of partnerships, must:
- Have been previously eligible for the Self-Employment Income Support Scheme first and second grant (although they do not have to have claimed the previous grants).
- Declare that they intend to continue to trade and either:
- Are currently actively trading but are impacted by reduced demand due to coronavirus.
- Were previously trading but are temporarily unable to do so due to coronavirus.
To have been eligible for the initial two grants, and therefore eligible to apply for the extended supports, individuals and members of partnerships must have met the following criteria:
- Trading profits of less than £50,000 in 2018/19 or an average trading profit of less than £50,000 from 2016/17, 2017/18 and 2018/19 tax years.
- Using your tax returns, HMRC will calculate your trading profits by taking turnover less any allowable business expenses and capital expenditure. Note allowable expenses include capital allowances, flat rate expenses, qualifying care relief and business expenses deducted through the trading allowance. HMRC will not deduct any losses carried forward from earlier years from your trading profits.
- More than half of their income in these periods must come from self-employment.
- They must have traded in the 2019/20 tax year, are continuing to trade when they apply for the scheme (or would be except for Covid-19), intend to continue to trade in the 2020/21 tax year and they have lost trading profits due to Covid-19.
- They have submitted an Income Self-Assessment Tax Return for 2018/19 tax year.
Level of support
The first grant – as part of this extension – will cover a three-month period from 1 November 2020 until 31 January 2021. The government announced on November 5, that it will increase the support available to the self-employed to mirror the extension to the furlough scheme. Rishi Sunak announced the UK government will provide a lump sum taxable grant covering 80% of three months average trading profits, capped at £7,500 in total. This is a further increase on the 55% previously announced.
Claims in respect of the new extended supports, which are taxable income and subject to National Insurance contributions, can be made online from November 30, 2020.
The second grant will cover a three-month period from February 1, 2021 until April 30, 2021, with the government to confirm the level of support to be provided in due course.
VAT Payment deferral
Self-employed who deferred VAT due from 20 March to 30 June 2020, can also avail of further government support. Instead of the full amount becoming due by the end of March 2021, UK VAT registered business can opt in to the scheme to pay smaller payments over a longer period, to 31 March 2021, interest free.
Government back support loans
On 2 November, the UK government also announced that businesses will continue to be able to apply to banks for government-backed support loans until 31 January, compared with a previous 30 November, deadline. These loans include the Bounce Back Loan Scheme and Coronavirus Business Interruption Loan Scheme.
The Irish Government announced a critical package of support to protect the jobs of self-employed workers across Ireland as a result of the Coronavirus pandemic.
Covid Restrictions Support Scheme (CRSS)
On 13 October 2020, as part of the budget, the Government announced CRSS – a new support scheme for business. CRSS provides a cash payment to be known as an “Advance Credit for Trading Expenses”. This payment will be equal to 10% of their average weekly turnover in 2019 up to €20,000 and 5% thereafter, subject to a maximum weekly payment of €5,000 for each week that their business is affected by the Covid restrictions.
The scheme is available to affected self-employed individuals and companies who carry on a trade or trading activities from a business premises located wholly within a geographical region for which Covid-19 restrictions are in operation.
CRSS is available where a business is either forced to temporarily close their business, or the business is required to operate at significantly reduced levels because of the restrictions. Generally, this refers to Covid restrictions at Level 3, 4 or 5 of the Government’s Plan for Living with Covid-19 but certain businesses may qualify for the support where lower levels of restrictions are in operation.
To qualify for the scheme, a business must be able to demonstrate that, because of the Covid restrictions, the turnover of the business in the period for which the restrictions are in operation and for which a claim is made, will be no more than 25% of the average weekly turnover of the business in 2019.
Government increases EQSS and PUP to €350
Following the recent move to Level 5 of the Plan for Living with COVID for the entire country, the Government have extended the Employment Wage Subsidy Scheme (EWSS) and Pandemic Unemployment Payment (PUP).
EWSS is revised to align with PUP with a maximum subsidy payment of €350 per employee per week. Prior to this change the top rate of EWSS was €203 per week and applied to employees with a gross weekly wage from €203 to €1,462. The changes are effective from the next payroll date after 19 October 2020.
The revised EWSS rates are:
Gross weekly pay EWSS
Less than €151.50 Nil
€151.50 to €202.99 €203
€203 to €299.99 €250
€300 to €399.99 €300
€400 to €1,462 €350
Over €1,462 Nil
The highest rate of PUP will be restored to €350 per week for those earning more than €400 per week before the pandemic. The increase will apply to payments on or after 27 October.
The PUP will now be paid at four rates as follows:
Gross weekly earnings PUP
Less than €200 €203
€200 to €299.99 €250
€300 to €399.99 €300
€400 or more €350
Commercial Rates Relief
The waiver of commercial rates for businesses negatively impacted by Covid-19 pandemic has been extended to 31 December 2020.
Pay and File Extension for Income Tax Returns
Revenue have announced an extension until 10 December, for 2019 income tax returns that are filed and paid online via ROS. This extension also applies to pension contributions, so self-employed taxpayers can claim tax relief on pension contributions up to the date that they submit their 2019 income tax return.
Furthermore, the debt warehousing arrangement has been extended to income tax liabilities. This means that the balance of income tax due in relation to 2019 together with preliminary tax for 2020 can be warehoused if as a result of Covid-19 restrictions the taxpayer’s total income for 2020 will be less than 75% of the individual’s total income for 2019. To avail of the debt warehousing scheme for self-assessed income tax, a taxpayer is required to make a declaration to the collector general when filing their income tax return for 2019.
For the most up-to-date information on covid-19 financial support (NI and ROI), visit: www.pkffpm.com