HMRC has confirmed that the fifth Self-employment Income Support Scheme (SEISS) grant covering the period May 2021 to September 2021 will open to claims from late July.

To be eligible for the grant, an individual must be self-employed or a member of a partnership. They must have traded in the tax year 2019/20 and submitted their tax return on or before 2 March 2021, and also have traded in the tax year 2020/21. Claimants must either be currently trading but are impacted by reduced demand due to coronavirus or have been trading but are temporarily unable to do so due to coronavirus.

The amount of the fifth grant will be determined by how much an individual’s turnover has been reduced in the year April 2020 to April 2021.

HMRC will provide more information and support by the end of June 2021 to help individuals work out how their turnover was affected.

The online claims service for the fifth SEISS grant will be open from late July 2021. In mid-July HMRC will contact individuals who are eligible based on their tax returns to give them a date from which they can make their claim.

Internet link: GOV.UK publications

On 6 April, the Recovery Loan Scheme (RLS) was introduced to replace the government’s coronavirus lending schemes.

The RLS provides financial support to businesses affected by the COVID-19 pandemic. The scheme gives lenders a guarantee of 80% on eligible loans between £25,000 and £10 million to give them confidence in continuing to provide finance to UK businesses.

The RLS is open to all businesses, including those who have already received support under the previous COVID-19 guaranteed loan schemes, the Bounce Back Loan Scheme, the Coronavirus Business Interruption Scheme and the Coronavirus Large Business Interruption Scheme although the amount they have borrowed under an existing scheme may in certain circumstances limit the amount they may borrow under RLS.

The RLS is initially available through a number of lenders accredited by the British Business Bank.

Internet links: British Business Bank website

The Association of Independent Professionals and the Self-Employed (IPSE) has stated that the recent changes to the rules relating to off-payroll workers, commonly known as IR35, ‘undermine the self-employed at the worst possible time’.

The changes to IR35 took effect on 6 April 2021 and shifted responsibility for making the decision on employment status on each contract away from contractors and personal service companies (PSCs) and on to the client receiving their services. This has already been done in the public sector.

Research carried out by IPSE found that 50% of contractors planned to stop contracting in the UK once the changes took effect unless they could secure contracts unaffected by them. 24% are planning to seek contracts abroad; 12% plan to stop working altogether; 17% will seek an employed role; and 11% are looking to retire within the next year.

Additionally, 24% of contractors said their clients are planning to blanket-assess all their contractors as ‘inside IR35’. 

Andy Chamberlain, Director of Policy at IPSE, said:

‘The changes to IR35 would do serious harm to the self-employed sector at the best of times, but now they are adding drastic, unnecessary damage to the financial carnage of the pandemic – undermining the UK’s contractors at the worst possible time.

‘The crucial problem with IR35 is still its complexity: in fact, it is so complex that HMRC has lost the majority of tribunals on its own legislation. And there remains serious doubts about the CEST tool HMRC designed to supposedly cut through this complexity.’

Internet link: IPSE website

The Confederation of British Industry (CBI) has urged the government to extend the Kickstart Scheme to help young people who are bearing the brunt of the subdued job market.

The Kickstart Scheme was launched in September and promised to pay the wages and associated employment costs for businesses taking on 16 to 24-year-olds in receipt of Universal Credit up to six-month contract periods.

The UK unemployment rate fell to 4.9% in the three months to February, according to the latest figures from the Office for National Statistics (ONS). However, 56,000 workers were cut from company payrolls in March, which represents the first monthly drop since last November.

Around 813,000 workers have been cut from company payrolls in the last 12 months as the pandemic adversely affected the jobs market. The ONS said young people continued to bear the brunt of the crisis amid job losses in sectors such as hospitality and retail.

People under 25 accounted for more than half of the jobs lost in the year to March, it added.

Matthew Percival, Director of People and Skills at the CBI, said:

‘Evidence continues to mount that it is young people’s jobs that have been hardest hit by lockdowns. Support for jobs and training will be vital to making the UK’s economic recovery inclusive.

‘Government should confirm that the extra lockdown at the beginning of the year means that the Kickstart Scheme will remain open for longer to allow businesses the time to deliver opportunities for young people.’

Internet links: CBI website

On 19 April, a government-backed mortgage scheme to help people with 5% deposits get on to the housing ladder was made available to lenders.

First announced at the 2021 Budget, the scheme will help first-time buyers or current homeowners secure a mortgage with just a 5% deposit to buy a house worth up to £600,000. The government says this will provide ‘an affordable route to homeownership for aspiring homeowners’.

The government will offer lenders the guarantee they need to provide mortgages that cover the other 95%, subject to the usual affordability checks.

The scheme is now available from lenders on high streets across the country, with Lloyds, Santander, Barclays, HSBC and NatWest having launched mortgages under the scheme and Virgin Money following shortly.

Miguel Sard, Managing Director of Home Buying and Ownership at NatWest, said:

‘We welcome the government’s new mortgage guarantee scheme to give further support to those with smaller deposits. For those customers, particularly younger or first-time buyers, saving up for a big deposit can often be difficult, and we know people in these groups are some of the hardest hit by the effects of the pandemic.

‘A government-backed scheme will help segments of the market for whom homeownership has felt far out of reach in recent months.’

Internet link: GOV.UK