Government Financial Support For Self-Employed Jan 2021

We have now entered into the 3rd Lockdown and the Government has acknowledged the impact by announcing new Financial Aid via different schemes.  The nature of this support to businesses is implemented in many different ways.

1        Self Employment and Universal Credit

This financial support package helps with living costs.  You can get it if you are on a low income, out of work or cannot work. If you get any of the grants (ARG or LRSG) your UC payments may stop or decrease.

Payments are based on:

  • Information about your business.
  • How much you have earned from self-employment, even if it is nothing
  • Any money paid into a pension

Information about your business

  • Total amount your business received
  • Spent on different types of expense e.g. travel costs, stock, equipment, tools, clothing and office costs.
  • How much tax and national insurance your business paid.
  • Also applies to company directors even those paying themselves by PAYE.

Business Property

You do not need to report things your company already owns such as machinery, buildings, or cash in your company account.

Payment

Due to coronavirus, payments are currently being calculated on actual earnings and not assumed earnings known as Minimum Income floor.

If your both employed and self-employed, your earnings will be calculated based on combined earnings. If you make a loss from self-employment, only your employment earnings will be used to calculate how much UC you get.

2. Self Employment Income Support Scheme

This scheme is intended for self-employed or members of a partnership and you reasonably believe your business will have a significant reduction in profits. You cannot claim the grant if you trade through a limited company or a trust.

If you were not eligible for the first or second grant, based on your self-assessment you will not be eligible for the third. To claim you must have had a new or continuing impact from coronavirus between 1st November 2020 and 29th January 2021.

Deadline

Online service, claim by 29th January 2021, claimed made are from the date provided by HMRC either by email, letter or within the service.

Eligibility

  • Be currently trading but are impacted by reduced demand due to coronavirus or
  • Have been trading but are temporarily unable to do so due to coronavirus
  • You must have traded in both tax years 2018-19 & 2019-20
  • self-assessment trading profits no more than £50k and at least equal to your non-trading income.
  • If you are not eligible based on 2018-19 tax return, HMRC will look at the tax years 2016-17, 2017-18 and 2018-19.

Calculation

  • 80% of your average monthly trading profits
  • paid out in a single installment covering 3 months’ worth of profits
  • capped at £7,500 in total
  • does not need to be repaid if eligible.
  • subject to income tax and National Insurance
  • must be reported on your 2020-21 self-assessment tax return.

These circumstances that can affect your eligibility e.g.

  • Your return is late, amended or under enquiry
  • You are a member of a partnership
  • You had a new child
  • You have loans covered by the loan charge
  • You claim averaging relief
  • You are a military reservist
  • You are non-resident or chose the remittance basis
  • You have received State aid

You must make your claim HERE on or before 29 January 2021.

For more assistance on this matter contact Sterling Finance and we will be able to help. Our contact details are:

Sterling Finance UK Limited

Website:           www.sterlingfinance.net

Email:               info@sterlingfinance.net

Tel:                    0161 339 4989



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