FAQ

Additional questions we’ve been asked and the answer we believe to be correct (details will be emerging over the next few days and we will update as necessary)

1. If I started my business since April 2019 and was about to submit a self assessment tax return for the first year trading, will I be eligible for SEISS (self employed income support scheme) if I get my return in super quick?

Sadly no, as it stands

2. If one year or more were over the 50k ceiling but the third was well under and overall I had an average of 50k or less (so a total of 150k or less) am I still eligible. ie does one year over 50k strike me out?

You are safe. It does not strike you out. It’s based on the average. We checked here on the government’s site

3. If my average earnings over 3 years were more than 150k can I get the grant?

Unfortunately not.

4. Does the grant have to be paid back?

No it doesn’t BUT an element of it will need to be put aside for tax purposes as it will be taxable.

5. What does it mean by taxable?

The money the self employed person gets will have to be taxed and declared on their tax return for the relevant return. The money the furloughed employee gets will also be taxed in the usual manner.

6. Can I continue my self employment and be eligible for the grant?

Yes you can (although furloughed employees who are at home and being paid their 80% are not able to continue working at all). So it’s different for self employed. You are allowed to carry on working.

7. I gather it will be paid in June but does that mean there’s nothing until then? how will I pay my bills?

It does mean you get nothing from that particular grant for a few months. The government are suggesting that we apply for Universal Credit and (Contributory) Employment and Support Allowance meanwhile. Any payments from these schemes should be seen as an ‘advance’ against the money which will come in June (if the grant for the three months is more than you’ve been paid on Universal Credit) There are criteria for this and it’s all laid out here

However, your ‘bills’ should be entirely cut back. And ask for loans and mortgages to be put on hold for now. And no one is allowed to be evicted for three months for non payment of rent.

If you’ve got a vat bill coming up, you won’t need to pay that yet.

If you’ve got a payment on account for July, you won’t need to pay that in July either.

If you need to apply for a loan, please look up the CBILS Coronavirus business interruption loan scheme. It’s an interest free loan for twelve months, where the interest is paid by the government. There are qualifying criteria, no surprise there. More about this here

8. How do we apply for the grant?

HMRC will contact you and ask you to complete an form. They will write everyone a letter. DO NOT respond to an emails, texts, whatsapp messages etc purporting to be from the government. There’s scammers around. They’ve multiplied and are taking advantage of these strange times. If anything you receive asks you to input your bank details, do not do it. HMRC are taking this very seriously, they are warning people too.

9. I know this is not about being self employed technically but I am a director of a limited company, I am the sole director and often counted as being ‘self employed’. I pay myself the minimum via PAYE and then top up my earnings when I can with dividends (which I pay tax on). What will I get under this scheme?

Under this scheme you will get nothing as you are not actually self employed. You are technically PAYE and although your total income might be one figure, which includes dividends and perhaps rental income, the PAYE proportion is the figure which is going to be used. The only option at present is to furlough yourself and get a rebate from the government of 80% of your PAYE figure for the correlating month in the year before. Or if your pay varies month to month, an average of your pay over the previous twelve months.

10. Still about directorships – I am a sole director and my business has vanished almost overnight. I would like to furlough myself, is this possible?

Yes it is. As long as the director does not actually work, they can keep the business going and meeting it’s filing obligations. You could furlough yourself for three weeks and work for a week and then refurlough yourself if this made sense for you. You can also work (if it’s not for your own business) when you are furloughed.

11. My staff are on variable hours contracts, how do I know what to pay them?

If your people were with you for the last year, use an average from that period, pro rated. You can also use the last available months figure, or the figure relating to the same month last year (whichever is the greater).

12. I am on a fixed term contract which runs out over the next few weeks

Ask for your contract to be extended and ask to be furloughed if possible

13. Most of my work is over the summer and I am a seasonal employee. Each year I do a similar amount of hours and I am paid by PAYE.

You should be able to be furloughed (if the job is no longer available – say as an invigilator for exams) and the money you usually get used as the monthly salary, for the corresponding month the year before

14. I am on a zero hours contract. Do I qualify for anything?

Yes you do, if you are paid by PAYE then you qualify. Contact your employer about furloughing you if there’s no work or you’ve been laid off.

15. I have been put on unpaid leave for the last few weeks on account of Coronavirus affecting the business. Am I entitled to furlough pay?

Yes you are. Get in touch with your employer and show them this document 

16. I have been laid off because of coronavirus. Can I go back to my employer and ask to be furloughed?

Yes you can. It is at their discretion, but show them this document

17. I left my last employer recently to take up a new job which is now not starting. I was employed by my old employer before or after 19th March. I’ve been told I could ask them to re employ me so I can get furlough pay. Is this right?

Yes it is. It is up to them though, whether they do this. They could make you redundant at the end of the furlough period.

18. I wanted to apply for Universal Credit but was told that as I have over £16,000 savings (between me and my other half) I am not eligible. Thing is, a lump of that money is put aside for tax and national insurance as I am self employed. Is that right?

I am glad you asked this, they’ve changed the rules on this, so I’ve heard. And it’s been confirmed (by Martin Lewis Money Saving Expert) that you must declare this money but show how it relates to the expected tax and national insurance calculations you have made and please reapply if you were turned down as this should not make you ineligible if your other ‘savings’ bring you under £16,000. Please apply here. Or use your existing ‘journal’ to message them again.

19. Someone told me that as I am a key worker and work for a government funded organisation, that I can’t be furloughed. But my children need looking after. Can I be furloughed?

Yes, you can. Please look at this document which explains that you are (and show anyone you need to)

20. My employer says I can’t be furloughed because the company is still going. Is this right?

No it’s not. An employed can choose to furlough some employees and use their discretion about who is furloughed and also swap who is furloughed and who is working –  the minimum period for being furloughed is three weeks.

21. If I take someone back on, who had previously left, but there’s no job for them when the furlough period ends? what do I do then?

If there is no work for them, or you only took them on to help them out, you will need to make them redundant. Redundancy notices will need to be served 45 days before it takes effect. (The usual regulations apply). This is why the government has announced (17th April) that the furlough scheme will run for an additional month til the end of June, to keep people protected in the system.

More information is available here in this document

This video below might help clarify some of the issues

I hope this information has helped. But if you need more help, please contact us, even if you are not our clients, email helen@theaccountancypractice.com and we will see if we can answer your questions. We won’t charge you! we don’t charge anyone for advice. That’s what we believe we’re here for. Straight talking, down to earth and friendly. That’s us!

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