You will be aware of the announcement from The Chancellor last night regarding the new Self-Employment Income Support Scheme. This is designed to help many self-employed people throughout the UK who may lose income as a result of the coronavirus outbreak.
Covid-19: Information for childminders about business and financial support
You may have received an email from HMRC about this. However, we thought it might be helpful to summarise the main points of interest and action for you as a childminder, to provide some advice for those of you who may not be eligible for this scheme and/or for those of you who may require financial support in the short-term.
SELF-EMPLOYMENT INCOME SUPPORT SCHEME
1. Are you eligible for the scheme?
You can apply to the scheme if you:
- have submitted your Income Tax Self-Assessment tax return for the tax year 2018-19
- traded in the tax year 2019-20
- are trading when you apply, or would be except for COVID-19
- intend to continue to trade in the tax year 2020-21
- have lost trading profits due to COVID-19
NOTE: If you have not submitted your Income Tax Self-Assessment tax return for the tax year 2018-19, you must do so by 23 April 2020.
2. How much will you receive?
You will get a taxable grant which will be 80% of the average profits from the tax years (where applicable):
- 2016 to 2017
- 2017 to 2018
- 2018 to 2019
Once HMRC has received your claim and established that you are eligible for the grant, they will contact you to tell you how much you will get and the payment details. Please note that if you claim tax credits, you’ll need to include the grant in your claim as income.
Currently, the projected commencement date is June 2020 (and payment will be backdated to the beginning of March), but The Chancellor stated that they are doing all that they can to try and bring this forward. For financial support in the meantime, please refer to the other sources of income at the bottom of this page.
WARNING
You will access this scheme only through GOV.UK. If someone texts, calls or emails claiming to be from HMRC, saying that you can claim financial help or are owed a tax refund, and asks you to click on a link or to give information such as your name, credit card or bank details, it is a scam.
WHAT CAN YOU DO IF YOU ARE NOT ELIGIBLE AND / OR NEED FINANCIAL SUPPORT BEFORE JUNE?
We recognise that not everyone will be eligible for this scheme (i.e. childminders within their first year of practice, who have not filed tax returns and do not have a childminding business tax history on which to base this grant). We also recognise that as grants are not currently expected to be paid before June (although this might change), this could cause financial difficulty for many.
Financial Support for Newly Self-Employed
The Scottish Government has announced a £100 million fund to support the self-employed, which should help those childminders who have been unable to apply for financial support due to being new businesses and ineligible for benefits. If you are newly self-employed and facing hardship, you may be eligible for a £2,000 grant through the Newly Self-Employed Hardship Fund, which opens today (30 April 2020) and is managed by local authorities. Read more
Additional sources of financial support
The main alternate source of financial support being recommended by the UK and Scottish Governments, at this time, is Universal Credit. This benefit is intended for people in the UK who are either on low income or out of work. While this benefit is for an individual, if you live with your partner, your partner’s income and savings will be taken into account, even if they are not eligible for Universal Credit.
Find out if you are eligible and how to apply.
- The UK Government has put in place a range of financial support during the coronavirus outbreak. This includes relaxations around the claiming of Universal Credit, relaxations on Employment and Support Allowance (an alternative to Statutory Sick Pay which can be claimed by the self-employed in self-isolation, from Day 1 (rather than Day 4), and supporting mortgage and rental payment holidays for 3 months for those affected by the coronavirus outbreak. Summary of measures available and further links to these.
- In parallel, both the UK and Scottish Governments have taken action to ensure that no tenants are evicted during this period.
- Many banks, building societies, and commercial companies have recognised the extreme position in which we all find ourselves and are offering financial support through different means (payment holidays/deferred payments, interest-free loans, extended overdrafts etc). There are too many to mention here.
However, what we would recommend is that if you are worried about your income or being able to make payment to different providers contact them as soon as possible to discuss your personal circumstances and to explore what financial support they may be able to offer you at this stressful time.
- If you employ paid Assistants, the UK Government has also announced the Job Retention Scheme through which employers can place employees on ‘furlough’ for up to 3 months, initially, and the government will pay 80% of their wages (to be paid back to employers via a grant). Further information.