Actions self-employed individuals should consider in these challenging times

Written on April 7, 2020 by Xeinadin Group

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Apply for grant under self-employed support scheme

When available a grant of 80% of their profits up to a cap of £2,500 per month. HMRC will use the average profits from tax returns 2016-17, 2017-18 and 2018-19 to calculate the size of the grant. The scheme will be open to those individuals with the majority of their income from self-employment and who have profits of less than £50,000. Further details and how to claim can be found online.

Defer 31st July tax payment           

Self-assessment income tax payments due on 31st July 2020 can be deferred to 31st January 2021. The deferment is optional, and no applications are necessary. No penalties or interest will be charged if payment is deferred. Cancel DD if paying by direct debit.

Deferring VAT          

Temporarily cancel HMRC direct debit until further notice. At the moment the VAT can be deferred to April 2021, but this deadline may change. You will need to cancel the direct debit otherwise HMRC will take the VAT due. VAT Returns still need to be submitted.

De-register for VAT

Extreme care is needed as there are a number of potential problems. It may not be possible to de-register in some cases and overall it may be more beneficial to stay VAT registered. Talk to us first, to fully consider the impact, and assess whether possible. There may be other action that can be taken to help.

Consider changing the business year end

Where trading has stopped, or profits dropped off a cliff then it may be possible to defer tax or even reclaim tax already paid. Talk to us first, to fully consider the impact, assess whether possible or even worthwhile.

Consider what further claims are possible

There may be other ways to reduce tax bills or identify possible tax payments if a deep dive review is undertaken in specialist areas. We are happy to talk this through and put you in touch with appropriate specialists if required.

Consider seeking finance

If you require help with accounts and financial projections before approaching financial institutions, please do talk to us.

Business Interruption Loan Scheme         

Loans up to £5 million are available from accredited lenders providing criteria met. Will need to provide copies of accounts and financial projections. Lenders may also offer commercial loans if appropriate. Talk to us first for help with accounts and financial projections.

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