Tax and contracting News
27 - 03 - 2020
The Self-employment Income Support Scheme
SEISS
Please be aware that this note is based on the information published as at 27 March 2020 and is intended to provide guidance on how Foremans LLP believe at this juncture the scheme will be implemented. The information is based on Foremans LLP’s interpretation of the available data. You should not regard this as advice on how the scheme will operate as several factors have still to be announced.
The scheme is intended to provide a grant to self-employed individuals or partnerships worth 80% of their profits per month up to a cap of £2,500 per month. The scheme is available initially for the next 3 months. The intention is to provide similar support to the self-employed as the Job Retention Scheme does for employees.
Eligibility:
To be eligible you must meet all of the criteria below:
1. Be self-employed or a member of a partnership. Please note we do not believe Company Directors will be treated as self-employed;
2. Have lost trading/partnership profits due to COVID-19;
3. File a tax return for 2018/2019 as self-employed or a member of a trading partnership;
4. Have traded in 2019/2020;
5. Be currently trading at the point of application (or would be except for COVID-19);
6. Intend to continue to trade in the tax year 2020/2021;
7. Have trading profits of less than £50,000;
8. More than half of your total income comes from self-employment. This can be in reference to at least one of the following conditions:
· Your trading profits and total income in 2018/2019
· Your average trading profits and total income from up to the three years between 2016/2017, 2017/2018 and 2018/2019.
Access
1. HMRC will be administering the scheme.
2. Individuals should not contact HMRC now.
3. HMRC will use existing information, we believe from filed self assessments, to check eligibility and invite applications once the scheme is operational.
4. Grants will be paid directly to the eligible claimants’ bank account.
5. Grants are expected to be paid out by the beginning of June 2020.
If you are eligible but have not submitted your self assessment tax return for 2018/2019. HMRC have announced that you have 4 weeks from 26 March 2020 to file the return and, therefore, become eligible for the scheme.
Grant Amount
The amount of the grant per month will be the lower of:
· 80% of the average profits from the tax years 2016/2017, 2017/2018 and 2018/2019;
· £2,500.
WARNING
The Support Schemes announced by the UK Government are only available directly through HMRC. If you receive any communication including texts, calls or emails from anyone claiming to be HMRC saying that you are due a tax refund or saying that you can claim financial help PLEASE DO NOT click on any links or provide any personal information. We are aware that there are may scams currently circulating and do not want you to get caught.
Further useful information can be found at:
https://www.businesssupport.gov.uk/self-employment-income-support-scheme/
If you would like to discuss any of the issues noted above please contact us on:
01244 625 500 or 01978 364 000
contactus@foremansllp.com
Whilst all due care and attention has been taken in the preparation of these notes no liability can be accepted for any omission or item contained therein.
Foremans LLP
27 March 2020
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WEEKLY INCOME INFORMATION
Income For A Week
Pre Tax Income
Choose the Industry Sector that you work in. Use the drop down menu in the usual way.
The VAT Flat Rate Applied -
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RESULTS TABLES
COMPARISON TABLE FOR NET INCOME
RELATIVE INCOME BY STRUCTURE
Weekly by :-
Annually by :-
Weekly by :-
Annually by :-
Fixed Data
PAYE
Statutory rates
CIS
Corporation tax
National insurance
UMBRELLA COMPANY
AGENCY INFORMATION
Assumptions
General
- The user is over 21 and subject to tax in the UK
- The user wishes to minimise their tax liability
- The user is subject to national insurance i.e.he/she is not over retirement age
- Only current tax rates and limits are applied
- No tax mitigation payments are made e.g. pension contributions
- Only 3 digit letter 'L' tax codes shown in the drop down list can be entered
- The user does not have a turnover greater than £100,000 where fewer reliefs and or higher taxes may apply
Expenses
- All miles claimed as expenses are for business use using a personally owned car or van
- All other expenses claimed are wholly, necessarily and where appropriate exclusively for the benefit of the business
Foremans LLP Charges
- Foremans fees associated with Limited Company, Sole Trader or Umbrella are as per published rates
- Foremans current Service Costs are allowed for in all calculations.
Holiday Pay
- Holiday pay is accumulated week by week by Umbrella or Agency employer but paid out during the year
VAT
- Limited Company or Sole Trader will be VAT registered
- Limited Company or Sole Trader will take advantage of Flat rate VAT
- Flat rate applied includes the benefit of the additional 1% applicable to the first year of VAT registration
Limited Company Conditions
- One director / one shareholder in a Personal Service Company
- Director of Personal Service Company elects to vote for 100% dividend after salary, costs and expenses
- Director's salary is maximum salary to the primary threshold for NI
- The Limited Company is trading normally i.e it is not subject to IR35 and is not a Managed Service Company
NOTES
- The Current tax rates are taken from the Fixed Data Table
- The current Value Added Tax Rate is 20% and is applied to all invoices and expenses as appropriate
- The Director's Salary is fixed in relation to National Insurance thresholds. Higher Rate Taxpayers should consider the advantages and disadvantages of a larger annual salary or bonus
- Higher Rate Taxpayers may wish to consider the advantages and disadvantages of shared ownership of their business
- Users with a tax code other than three digits and letter "L" may telephone or email our Development Department to request a detailed calculation
- Generally the use of an Umbrella rather than an Agency payroll is only efficient if sufficient weekly expenses are allowable and claimed
- The expenses claimed under an Umbrella should not prevent the proper operation of National Minimum Wage
Dave Wilde, Foremans (UK) Limited
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