Tax Free Grants for the Self-employed?
In an effort to help the current situation for the Self Employed, Heather Self a Partner at leading accounting and tax advisory firm Blick Rothenberg has made a number of suggestions which Government could embrace
“It’s a difficult time for those who are self-employed and believe that they have been left behind. I am sure that this is not the case but it’s up to all of us to work together.”
She added: “ Most self-employed people who have to make a self assessment return use an accountant so it is up to us to come up with ideas we think will help them and assist the government with its plans and calculations.
“This is what I have attempted to do with the following suggestions which I have sent to HMRC.”
a. Anyone who has commenced self-employment prior to 1 January 2020 will be entitled to a tax-free grant
b. For those who were self-employed in 2018/19 and were still self-employed at 1 January 2020 the initial amount of the grant will be the lower of:
– 50% of the personal allowance claimed in their 2018/19 tax return, and
– 50% of their self-employed income for 2018/19
c. For those who commenced self-employment in 2019/20 the grant will be the lower of:
– 45% of the personal allowance they are entitled to for 2019/20, and
– 50% of their self-employed income for 2019/20
Heather added: “ The grant can be claimed in the 2019/20 tax return which is due to be filed by 31 January 2021. If it produces a repayment, the repayment claim will be processed in the normal way.
“While this would not produce any immediate cash, it would reassure the self-employed that funds they have set aside to pay their taxes could be used to tide them over. Easy access to short term loans may also be needed, but the Government’s existing measures should help with this – and if not, they should be quickly extended.”
Heather said: “ This would get an initial grant of just under £6000 to a large proportion of the self-employed, and the figure would be easy to calculate. Those fortunate to earn more than £125,000 would not qualify, as they do not get the personal allowance.
“Further help will also be needed in the coming weeks – perhaps a more sophisticated system of income support, based on average earnings over the last 3 years, as Norway are proposing. But in the same way that the Chancellor has reassured employees, he needs to get some immediate help to the self-employed.”
