Most of you will have read the headlines about the Coronavirus Job Retention scheme and the Self-employment Income Support Scheme, but how does it apply to GPs whose income has been affected?
- The new Self-employed Income Support Scheme (SEISS) is for the self-employed, including members of a partnership.
- This scheme will allow you to claim a taxable grant worth 80% of your average trading profits up to a maximum of £2,500 per month for the next 3 months (April 2020 to June 2020). This may be extended if needed.
- You must have submitted a 2018/19 Tax Return to be eligible and must still be trading in 2019/20 (or would be, if you did not have to stop due to COVID-19).
- You must also intend to trade in 2020/21.
- You must have lost trading profits as a result of COVID-19.
- It is only available if average annual taxable earnings are below £50,000. This is based on an average over the last 3 years (2016/17, 2017/18 & 2018/19). If you have not filed Tax Returns for 3 years then the Government will take the average based on what has been submitted for a shorter period.
- More than half of your income must come from self-employment.
- Anybody who started self-employment after 5 April 2019 will not be able to claim.
- The scheme will be available from the beginning of June 2020 and will be back-dated three months to 1 March 2020. It will be paid in one lump sum.
- HMRC will contact those eligible directly. You do not need to apply.
So who is it likely NOT to apply to?
- Higher earning doctors – over £50,000 per annum (averaged over 2016-17, 2017-18 and 2018-19). This will include most GP partners as well as full time freelance GPs.
- GPs who qualified after 5 April 19 and only started freelance work in 19-20.
- GPs who switched from salaried to freelance during 19-20.
- GPs who are also salaried and more than half their income comes from their salaried post.
- GPs who should have, but didn’t, complete an 18-19 tax return (there is a short window of opportunity to do a late return if applicable)
- GPs who stopped self-employment during 2019-20
There is also a separate scheme for employees who would otherwise have been laid off – but the Government has said that organisations who are receiving public funding specifically to provide services necessary to respond to COVID-19 are not expected to furlough staff. So that scheme will not be available for salaried doctors.
What other relief is available?
The Government have announced that July 2020 payments on account of tax may be deferred until January 2021. Whilst this is a welcome relief from a cash flow point of view, remember that it will need to be paid in January – so the amount due then may be unmanageable. If at all possible, put away the amount that should have been payable in July, so you have it towards the amount due in January.
- For people who are already behind with their tax payments, the HMRC attitude towards ‘time to pay’ has softened where you can show that the pandemic has affected your income levels.
- For people who cannot pay their mortgage or rent due to the impact of COVID-19, they should be able to obtain a three month repayment holiday. Note that this is only a cash flow saving – you will still need to make up the payments eventually.
- For GPs trading through companies, Companies House has agreed a 3 months extension to file accounts – this may help GPs who are working too much to be able to get their accounts done on time.
As a final backstop there is:
- For now the Government have relaxed the minimum income floor and have raised the payments for Universal Credit so self-employed individuals receive the same amount as someone on statutory sick pay, or £94.25 a week.
- If you need to claim Universal Credit, but have COVID-19 or are self-isolating, you will now be able to make a claim and to access advance payments without needing to attend a Jobcentre Plus.
- Unfortunately, the five week wait for new Universal Credit claims remains though.
Employment and support allowance
- The Government has promised that if you are sick or have been advised to self-isolate, you will be able to claim Employment and Support Allowance (ESA) from day one instead of day eight.
- You can make a claim for new style Employment and Support Allowance on the Government's website. You will need to fill in a NSESAF1 claim form to apply.
- The weekly payment for ESA is typically £73.10 or £57.90 for people under the age of 25
Please note that this was written the morning of 27th March. Rules are changing all the time, so do not take action on any of the points noted without confirming that they are up to date. Please contact Liz if you want to join the Honey Barrett mailing list to keep up to date with general changes for businesses and individuals.
Liz Densley is medical specialist partner with Sussex Chartered Accountants, Honey Barrett, and is secretary of AISMA (the Association of Independent Specialist Medical Accountants). Contact her at firstname.lastname@example.org.