June 2020 Newsletter | Cylchlythyr Misol Mehefin 2020
On Friday 29 May 2020, the Chancellor made two announcements regarding financial support available during the pandemic:
- Furlough scheme: from August, employers must pay National Insurance and pension contributions, then 10% of pay from September, rising to 20% in October, after which the scheme will end.
- Self-employed scheme: a second and final grant will be made available worth 70% of average monthly trading profits, paid out in a single instalment in August, capped at £6,570.
Mortgage payment deferrals have been extended for a further 3 months. Remember that interest will continue to accrue on any payments you defer, therefore if you can afford to continue making these payments, it may be sensible for you to do so.
As individuals may earn small amounts from miscellaneous sources during the lockdown, remember that HMRC have a £1,000 trading allowance, which allows you to earn up to £1,000 of additional miscellaneous income tax-free.
A new scam to be aware of as a result of the new contact tracing app initiative launched by the Government. Scammers have started creating fake tracing apps which require your financial details. The Government app will never ask you for financial information. If you are unsure as to its legitimacy, stay away.
We are often asked for recommendations for fellow professionals. Recently, these have included an employment lawyer for an individual made redundant due to Covid-19, finding an insurance broker for buy-to-let properties and mortgage brokers. If you require any advice, please let us know and we can hopefully point you in the right direction.
Ask Huw: I've recently been made redundant due to Covid-19 and I'm thinking of starting a new business. Can you help?
I generally advise people to start trading as self-employed, unless your industry dictates you must operate as a limited company. If after a few months you have a steady stream of income, I can assess whether it is advantageous for you to operate as a limited company.
I can register your company with Companies House in a matter of minutes, as well as registering your company for corporation tax with HMRC.
As a general rule of thumb, I recommend that your new business matches your current skillset. Do what you're good at.