Are you self-employed? How could you best help yourself?

If you are self employed, this could be a very anxious time, but we are here to help our clients see some of the potential opportunities that may arise from these unprecedented events.

Many may have farm shops or cafés and, although COVID-19 may have turned your world upside down, you should be looking for the long term openings that you could capture.

The new Self Employment Scheme, will allow you to claim a taxable grant of up to 80% of your trading profits up to a maximum of £2,500 per month for three months (back dated to 1 March). This may be extended, depending on where we stand with COVID-19 in three months time.

The scheme will be based on your previous 3 years profit, and is potentially available if you show a loss in your trading or partnership profits. However, in order to claim this you do not need to stop working, you can continue to work and earn money and still be eligible. Although, not a problem for some, the scheme is only available for those who have an average annual taxable profit of <£50,000 after reinvestment. Therefore those that were close to this threshold will need to remember to include it in their draft taxable profit figures when considering any yearend tax planning in 2021. Unfortunately, no help will be given to those who have only recently entered the self employed market and do not have a 2018-19 return, so will not help those who entered from 6 April 2019

Another consideration worth noting will be your eligibility to claim the Small Business Grant if you were correctly claiming the relief on 11 March 2020.

Whichever relief you are eligible for you do not need to do anything to claim them at the moment. You could potentially just sit back and wait for HMRC to contact you on the Self-employment Scheme and your local council to contact you on the Small Business Grant, of which some have already received their letters. However that said, you are a business owner and sitting back and waiting probably does not come naturally. Therefore, why not spend the time ensuring your business is well positioned for when we come out on the other side of COVID-19 together with checking your insurance details as COVID-19 has now been listed and therefore may mean that you can make a claim.

Many farm shops are providing delivery services, or café’s are now providing take away services which have enabled them to continue trading and serving their communities which will hopefully not go un-noticed when everything is back to normal. Another idea maybe to try and pull forward any DIY refurbishment, we appreciate this is not an essential role and therefore you may not be able to get outside contractors in but it does not mean to say you cannot do a top quality job yourself.

Although labourers may not be able to work from home, website designers are perfectly placed to work from home and therefore it may be a great time to re-design your website or social media platforms. This could be part of the long term business plan which you could revise during this period as well even if this is just getting up to date with your own costings or what the competition are doing.

A final idea maybe to bridge the gap in any training needs during this time, assuming that there are online or distance learning options. These could range from bookkeeping training to health and safety or human resources.

We appreciate that this may be a really tough time for many but it is key to try and embrace it as positively as you can whilst still remaining safe and looking after others.

The content of this article is for general information only and does not constitute tax advice. It should not be relied upon and action which could affect your business should not be taken without appropriate professional advice.

Written by Ellie Hammett ACCA

Sign Up to Our Newsletter