COVID-19: UPDATE FOR CONTRACTORS/SELF-EMPLOYED 24TH MARCH
We are here to help self-employed people and contractors as the coronavirus pandemic unfolds.
The Government has made a number of announcements on how it intends to support small businesses, and is being pressed to do more for the self-employed. We are keeping a watching brief and will bring you updates as they are announced, along with practical advice and support.
If you have a question you want answered, please send them to us at our usual email address: [email protected] We won’t publish your name but we may publish your question and the answer from our expert team if we think it will be of use to others.
It should be noted that much of the guidance is being updated daily – indeed the law is being written as we write. As such, you’ll need to check government sources regularly to confirm you have the most recent information. Some links are provided later.
Here’s what we know to date:
If you’re a limited company contractor and are ill then SSP can be refunded as your PSC (personal service company) is classed as a small business. SSP currently stands at £94.25 per and can be refunded for the usual two weeks that self-isolation may require.
80% salary grants
Businesses will receive government grants worth up to 80% of wages to keep workers in jobs. The Coronavirus Job Retention Scheme will pay up to £2,500 per worker each month, helping those who are self-isolating or caring for loved ones. However for many self-employed, that will be 80% of not much, if you have been drawing a small salary. More details on how to claim will be released soon.
There’s no VAT to pay until at least June. Don’t pay VAT now though, but be aware it’s likely you’ll need to catch up by March 2021. Don’t forget, this VAT doesn’t disappear, but is delayed in collection, so prepare and submit your returns in the usual way.
Instalments due in July 2020 will now not be payable until January 2021. Again, the tax will be due, but not for an extra six months.
For other taxes e.g. Corporation Tax if your business is impacted, you can arrange to pay over a longer time period. Given current pressures, it’s likely the qualification criteria will be simple. Call 0800 0159 559 – but lines will be busy – if your next payment isn’t for months, don’t call today. When you get through, you’ll have to explain why you are affected and then agree a deferred payment plan based on what you now expect to be able to afford.
It will be sensible to check with your JSA accountant what your liabilities are, allowing for the changes to VAT above, before calling though HMRC will want to make these agreements with you, not your accountant.
Small businesses could also be covered by loan support – but consult the guidance – this is ever changing. For more information, please visit the government’s Support for Business page.
We will keep you updated via our blog, but remember to email [email protected] and we will endeavour to answer as many questions as possible.