Grants now available for recently self-employed & some businesses not receiving rates relief

In today’s blog a quick update on a new Scottish scheme to support recently self employed & some businesses not receiving business rates relief.

Grants recently self employed

LIFELINE SUPPORT FOR BUSINESS CONFIRMED

The recently self-employed, who are excluded from the UK’s “Self Employed Income Support Scheme” but suffering hardship, will be able to receive £2,000 grants.

For creative, tourism and hospitality companies of up to 50 employees not receiving business rates relief, there will be rapid access £3,000 hardship grants or larger grants up to £25,000 where it can be demonstrated support is needed.

Background

Support for the newly self-employed and firms suffering hardship is to be paid in early May.

The Economy Secretary recently confirmed that grant funding for newly self-employed suffering hardship and Small and Medium Sized Enterprises (SMEs) in distress will be available shortly.

The £100 million fund to support the self-employed and  SMEs announced last week will be broken into three separate funds as follows:

  • £34 million Newly Self-Employed Hardship Fund, managed by Local Authorities, will be allocated to the newly self-employed facing hardship through £2,000 grants
  • £20 million Creative, Tourism & Hospitality Enterprises Hardship Fund, managed by the Enterprise Agencies in partnership with Creative Scotland and VisitScotland for creative, tourism and hospitality companies not in receipt of business rates relief
  • £45 million Pivotal Enterprise Resilience Fund, which is managed by the Enterprise Agencies for vulnerable SME firms who are critical for the local or national economic foundations of Scotland*

The Scottish Government will also be providing £1 million to top up Creative Scotland’s Bridging Bursaries in the not-for-profit sector.

Speaking in parliament, the Economy Secretary also confirmed that the grant funding will be open for applications by the end of April and highlighting that recipients will receive funds in early May.

Lifeline Support – Full Report

So some good news for newly self-employed as well as some businesses who previously did not qualify for grants.

Until the next time!

* The support and larger grants for pivotal SME’s will depend on the specific need of the enterprise and be developed by the relevant enterprise agency with wraparound business advice and support.

Contact us

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Charles Donkers (ACMA), Tulip Thistle Accountancy

The information contained in this blog is for general information purposes only. The information is provided by Tulip Thistle Accountancy and while we endeavour to keep the information up to date and correct, we make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability or availability with respect to the blog or the information, products, services, or related graphics contained on the blog for any purpose. Any reliance you place on such information is therefore strictly at your own risk.

In no event will we be liable for any loss or damage including without limitation, indirect or consequential loss or damage, or any loss or damage whatsoever arising from loss of data or profits arising out of, or in connection with, the use of this blog.

 

“Coronavirus Self-Employed Income Support Scheme”; what you need to know

In today’s blog, here at Tulip Thistle Accountancy, we are going to explain the recently announced Government “Self-Employed Income Support Scheme”, to help self-employed people (and those in partnerships) understand how the scheme works and how to check if they qualify.

Self Employment Support Scheme

HELP FOR THE SELF EMPLOYED

Chancellor Rishi Sunak has announced measures to support the self-employed and partnerships.

The scheme is called the Coronavirus Self-employment Income Support Scheme (CSEISS).

If you have suffered a loss in income, a taxable grant will be paid to the self-employed or those in partnerships, worth 80% of profits up to a cap of £2,500 per month.

Initially, this will be available for three months in one lump-sum payment and will start to be paid from the beginning of June.

You cannot apply for this scheme yet. HMRC will contact you if you are eligible for the scheme and invite you to apply online.

Who is eligible?

Self-employed individuals and a those who are a member of a partnership. You must satisfy all five conditions below:

  1. have submitted your Income Tax Self-Assessment tax return for the tax year 2018-2019
  2. traded in the tax year 2019-20
  3. are trading when you apply, or would be except for COVID-19
  4. intend to continue to trade in the tax year 2020-2021
  5. have lost trading/partnership trading profits due to COVID-19

Your self-employed trading profits must also be less than £50,000 and more than half of your income should be from self-employment. This is determined by at least one of the following conditions being true:

  • having trading profits/partnership trading profits in 2018-19 of less than £50,000; and these profits constitute more than half of your total taxable income
  • having average trading profits in 2016-17, 2017-18, and 2018-19 of less than £50,000; and these profits constitute more than half of your average taxable income in the same period

If you started trading between 2016-19, HMRC will only use those years for which you filed a Self-Assessment tax return.

There a few individuals who have not submitted their 2018-19 Self-Assessment tax return and to qualify, they now have until the 23 April 2020 to do so.

And finally please be aware that any payments made by HMRC will be taxable in the 2020/2021 tax year.

Now Let’s look at a couple of examples:

Examples

Example 1

John is self employed and also has some other income (e.g. from employment, savings income or rental income etc.)

Tax Year Self-Employed Profits (£) Other Income (£) TOTAL Income (£) % Self Employed
2016 – 2017 10,000 40,000 50,000 20%
2017 -2018 20,000 30,000 50,000 40%
2018 – 2019 40,000 10,000 50,000 80%
TOTAL 70,000 80,000 150,000 47%
average 23,333
monthly avg 1,944.44
    • Income and profits above show John has been trading in the last three years. John also traded in the 2019 – 2020 Tax Year (from 6 April 2019 – 5 April 2020) and he plans to continue to trade in 2020/2021 Tax Year but with lower profits due to COVID-19
      • Above means the basic 5 conditions are met
    • Additional requirement is that John’s trading profits must also be less than £50,000 and more than half of his income should be from self-employment.
      • Again he can meet this requirement as based on 2018/2019 Tax Year he had Self-Employed profits of £40,000 (i.e. less than £50,000 threshold) and his self-employed profits were 80% of his total income (more than 50% as required).
      • Note that John would not meet the requirements on the basis of average profits (only 47% of his income originates from self employment) but you only have to pass either of the tests…
    • John’s 3 year average monthly profits are as follow: £70,000 divided by 36 months = £1,944.45 John would qualify for 80% of these; £1,944 x 80% = £1,556 per month (rounded)
    • He would therefore be entitled to a payment of £4,667 (again rounded and based on three months support at £1.944.44/month), payable in June 2020

Example 2

Mary started her business in October 2017 and her position is shown below*:

Tax Year Self-Employed Profits (£) Other Income (£) TOTAL Income (£) % Self Employed
2017 -2018 17,000 3,000 20,000 85%
2018 – 2019 40,000 8,000 48,000 83%
TOTAL 57,000 11,000 68,000 84%
average 28,500 5,500 34,000 84%
monthly avg 3,166.67
      • Income and profits are available for the past two tax years and effectively cover 18 months (October 2017 – March 2019). Again Mary also traded in the 2019 – 2020 Tax Year (from 6 April 2019 – 5 April 2020) and she plans to continue to trade in 2020 -2021 Tax Year but with lower profits as a result of COVID-19
        • As Mary started trading between 2016-19, HMRC will only use those years for which she filed a Self-Assessment tax return and therefore once again the basic 5 conditions have been met
      • Additional requirement is that Mary’s trading profits must also be less than £50,000 and more than half of her income should be from self-employment.
        • Mary meets both additional tests (remember meeting one is enough!)
      • Mary’s 2 year average monthly profits are as follows: £57,000 divided by 18 months = £3,166.67 per month. Mary would qualify for 80% of these; £3,167 x 80% = £2,533 per month (rounded)
      • However there is a £2,500 monthly cap/maximum
      • Mary would therefore be entitled to a payment of £7,500 (based on three months support at £2,500/month), payable in June 2020

Hopefully this blog has created a bit more clarity on how the “Coronavirus Self-Employed Income Support Scheme” will work and what payments people can expect, if they meet the criteria and are invited to apply by HMRC.

* please keep in mind opening year rules will still apply!

Until the next time!

Contact us

Photo self 2

Charles Donkers (ACMA), Tulip Thistle Accountancy

The information contained in this blog is for general information purposes only. The information is provided by Tulip Thistle Accountancy and while we endeavour to keep the information up to date and correct, we make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability or availability with respect to the blog or the information, products, services, or related graphics contained on the blog for any purpose. Any reliance you place on such information is therefore strictly at your own risk.

In no event will we be liable for any loss or damage including without limitation, indirect or consequential loss or damage, or any loss or damage whatsoever arising from loss of data or profits arising out of, or in connection with, the use of this blog.