Helping you with your Finances during Isolation 

Here are some moneysaving tips that you can undertake during these testing times.

1. If like most households you get paid at the end of the month, you will probably have arranged your monthly bills to be paid at the start of the month.

Change your payment date to the end of the month to coincide with your next salary payment. i.e.

The below graphic assumes you are paid the last Friday of the month.

The below graphic now shows the effect of rearranging the monthly bills, as you can see this means that April’s bills still get paid in April, but you now benefit from March’s salary with just the cost of living to be concerned about.

1. Whilst we are on the subject of monthly bills, it’s time to go through those statements and find out exactly what you are paying for its not unknown to still be paying for Insurance premiums for Items that no longer need the cover such as Mobile Phone cover.
2. Also check to see if your utility bills are on the best tariff – contact your supplier and check to see if they have any better tariffs or check https://www.which.co.uk/news/2020/01/which-reveals-best-and-worst-energy-companies-for-2020/
3. The biggest bill for most people is mortgage payments and now is a good time to check with your lender or your broker as to what deals are available should you be on your lenders standard variable rate.

Don’t forget that whilst the government has negotiated a 3-month mortgage break, a lot of lenders include ability to take mortgage payment holidays as part of your terms and conditions. Therefore check with your lender/broker if this is an option on your mortgage.  

If you are lucky enough to have this as an option, then consider utilising the governments option first and then your lenders as it is unknown as to how long the government will be able to continue to pressure lenders to offer payment holidays.

1. The government is there as a last resort with state support such as Universal Credit and other benefits and they may not be as generous as they were a few years ago but at least it is something.

To establish what you could be entitled to then please go to https://www.turn2us.org.uk/  a charitable organisation that has an outstanding benefits calculator that will provide guidance as to what benefits you can claim and for how much.

Further to the above a slightly more technical guide as to the various government announcements surrounding Job Retention/furloughing and the self-employed is below.

Thank you to UHY Accountants Birmingham for the provision of the information.

Self-Employed

 Key Points;

• You can claim a Taxable grant worth 80% of your trading profits up to £2,500 per month.
• This will run from 1^st March 2020 for three months but may be extended if needed.
• This scheme may not be available to apply to until 1^st June 2020.
• To Qualify
  • You would need to have submitted your Income Tax Self Assessment return for tax year 2018-19.
  • You would need to have traded in tax year 2018-19 and intend to continue to trade in tax year 2019-20.
  • You would need to have lost trade/partnership trading profits due to Covid-19.
  • Your Self-employed trading profits must be less than £50,000 and more than half of your income come from self assessment. This is determined by at lease one of the following;
    • having trading profits/partnership trading profits in 2018-19 of less than £50,000 and these profits constitute more than half of your total taxable income,
    • having average trading profits in 2016-17, 2017-18, and 2018-19 of less than £50,000 and these profits constitute more than half of your average taxable income in the same period.
    • HMRC will only use self assessment figures for years you have been trading between 2016-2019.
    • If you haven’t submitted your tax return for 2019 you have until the 23/04/20 to get this completed.
    • You cannot apply for this scheme yet.  HMRC will contact you if you are eligible for the scheme.
    • If you claim tax credits you’ll need to include this in your claim as income.
    • If you are a company director and paid through PAYE you may be able to get support through the Job Retention Scheme.

Employed - Job Retention Scheme

Key Points;

• You will need to write to any employee confirming they have been furloughed to be eligible to claim.
• Any UK employer with a bank account can claim, but the employee would have to have been on the PAYE payroll on 28^th February 2020.
• Employees can be on any contract, including temporary and Zero Hours.
• If an employee is sick or self- isolating because of COVID-19, you should process SSP while they are sick.  They can then be furloughed after this.
• If you made an redundant after 28^th February, you can agree to re-employ them and place them on furlough instead, and claim the 80% of the earnings.  This is not mandatory.
• Furloughed employees will have to stay furloughed for a minimum for 3 weeks.
• Employees would still pay Tax and NI and Pension on all earnings being processed.
• How the earnings will be calculcated are, if the employee has worked for you for a full year, you will claim the higher of;
  • The amount employee earned in the same month last year,
  • An average of your monthly earnings from the last year.
  • If the employee has been employed less than one year, it would be an average of their monthly earnings  since they started working.  This would be the same for Zero Hour Contracts.
  • Bonus’ Commission and fees are not included as part of the monthly earnings.

Thank-you for reading this article, we would love to help you with any financial concerns you have…

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