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I sincerely hope this update finds you well. It’s an understatement to say what we’re experiencing is outside of anything our society has faced before and the measures announced from the government to shore up our economy and support our communities are equally astonishing. I covered some of these in my last update. 

Well, one week later there’s another tranche of announcements to update you on tagged, as ever, with a commitment that my Manchester team are here to help you navigate this detail and, crucially to support our clients’ businesses in the face of this crisis 

As you might expect with every announcement, there’s a short period where we all absorb the information. There are questions about how it’ll all work and how long the measures will take to work and inevitably, there will be the many shades of grey in policies drawn up on the hoof. 

OK, bearing that in mind, let’s have a look at the latest updates.

Help For The Self-Employed

When the Chancellor announced the support package for at-risk PAYE workers it took no time for the self-employed to point out that they couldn’t survive on the £94 that Universal Credit would offer. One week later, the Chancellor came back with more support. To be fair to him he is listening and responding. He is doing a great job in these difficult circumstances. 

Here’s a summary of the Self-Employment Income Support Scheme.

  • Sole traders, partners etc. will receive 80% of their average monthly earnings to a maximum of £2500 for a reviewable 3-month period. 
  • The package is based on the enterprise’s taxable profits for the three years prior to the 18/19 financial year.  
  • It is only payable to firms who made less than £50k in profits in the relevant tax periods. Higher earners will not qualify.
  • HRMC is administering the scheme with payments scheduled for June backdated to March 2020. They will issue the cash as a none-repayable grant. The monies, however, must be declared as income in your 2020/21 tax returns.
  • It’s likely the scheme will have some flex to ensure it covers the needs of its intended beneficiaries. For example, it should make provision for people who only have two years returns or those that have mixed incomes from PAYE and self-employment. 
  • There may be cases where there are two self-employed people in a household. If both of these businesses have profits of less than £50k, both will qualify. 
  • Those that earned at, or around, the NI threshold of £6365 may be better off on Universal Credit.

There are no actions to take as HMRC is doing all the background work and will contact those who are eligible. However, those who find themselves outside the scope of this scheme will understandably have many questions. I’ll update my guidance as clarification emerges over the coming days. 

There is a call to action here. I’ll work with my clients to ensure you have all the information you need to check you get the right grant amount. Crucially, if you need to file your taxes for 19/20, we need to do that ASAP.  

Forewarned, is forearmed so get in touch and let’s get that admin sorted.

As an aside, eagle-eared clients will have noticed the low-key but highly significant warning from the Chancellor. He signalled his intention to look closely at the self-employment tax regime in the future. I think we can expect substantial changes and you may need to ask yourself; do these changes represent an equitable quid pro quo for the help offered during the pandemic?

The one elephant in the room here is the timescale. June 2020 is a long way off, so what can you do in the interim? Well, there are other things to look at and you should consider them in conjunction with the self-employment provision. 

  • A business loan via the CBILS scheme administered by the British Business Bank.
  • The deferral of tax and VAT payments
  • An application for Universal Credit 
  • Mortgage payment deferrals for your home and potentially business.
  • Your eligibility for a small business rates grant.
  • Ensuring you assert your rights as a renter and the (current) three-month protection from eviction 

Again, get in touch with us here at Enso. My team will do all we can to help you obtain any of the benefits to which you may be entitled.

Other Legislative Changes 

Alongside this attention-grabbing headline, there were also a series of other legislative changes announced by Alok Sharma, The Business Secretary. Here’s a quick summary of the red tape bonfire he’s devised to help the country cope: 

  • Competition laws were relaxed to allow supermarkets to work more effectively together.
  • Manufacturers of PPE equipment and hand sanitisers will get their product testing prioritised. 
  • Amendments to Insolvency will to help businesses continue to trade by retaining access to raw materials even if it is undergoing restructuring. Company directors will be temporarily immune from ‘wrongful trading’ provisions
  • Businesses can delay Company AGMs or hold them virtually on video using proxy voting.
  • Staff leave will be carried over for two years as they are accrued in company accounts.

Update on CBILS

I gave an overview of the CBILS loans scheme last week. The initial wording implied it’s a low risk loan, 80% backed by the government. It seemed there would be no need to surrender personal assets on default. It’s since emerged that this isn’t the case and a number of lenders were also demanding security from applicants.  

Happily, the resulting furore has clarified the position and lenders have changed their risk policies accordingly. However, best to check this with your provider before you decide to take advantage as you prop up cash flows etc. 

Scam Messages

Alas, alongside the outpouring of goodwill that Covid-19 has generated, it has also attracted the attention of the criminal classes. Be careful regarding scam emails, text messages and even callers to your door. If an offer seems too good to be true, it probably is. 

Do your homework; if you can’t find any public reference to proposed ‘government handouts’ etc., it’s because they don’t exist. Visit gov.uk for all up-to-date information.

Be on your guard! 

Get In Touch

That’s a lot of information to get your head around but be assured the Enso team is on hand to help so don’t hesitate to get in touch. These are historic events and                   we’re all doing what we can to cope and contribute. And let me confirm once again, we’ll be standing by our valued clients whatever it takes.

You never know when this is over; our society really may have changed for the better!

I’ll conclude by hoping you stay well and aren’t finding your efforts to socially-distance too onerous. 

Call my team and me today on 07792 686479 or email me at adam@meetenso.co.uk and let’s talk about how we can help. We’re in this together, and we’ll get through it together.

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