This next wave of Covid-19 may not be as deadly as the first, but it is still making an impact. And with the threat of even local lockdowns bearing down we wanted to recap and review our lessons from the first wave.

So what did we learn? Here’s a recap:

  1. Finances of freelancers and business owners are inextricably linked to their individual finances.
  2. We can think of our individual finances as if they were a business.
  3. CASH – liquidity is super important in these times, particularly if income has become lumpy. Try to make sure enough cash is available to cover outgoings. How? You may be able to take advantage of:
    1. Mortgage holidays are still available til the end of October
    2. Help with credit card debt also still available til end of October
    3. You may still be able to find some 0% credit cards (although watch out for fees)
    4. Save the money you may have spent on going out
  4. Government support. After Rishi’s latest announcement there is still some support available for freelancers and business owners to take advantage of:
    1. Cash grants for freelancers. Self Employed Support has been extended, albeit at a reduced level. Two additional taxable grants are payable for the three months from 1 November 2020 to 31 January 2021 and 1 February 2021 to 30 April 2021:
      • The first grant will be based on 20% of average monthly trading profits, capped at £1,875. It will be paid in a single instalment.
      • The government will set the level of this second grant and provide details in due course.
    2. Bounce back loans. Recent changes were announced to give businesses more flexibility in how they repay the loan. These include:
      • new and existing loans can be repaid over 10 years, rather than six
      • you can take one payment holiday lasting six months, but you have to have made six payments to use this option
      • you can choose to make interest-only repayments three times over the course of the loan, with each interest-only period lasting up to six months
    3. Income tax — Self-Assessment taxpayers can defer their tax payments even further. You could already move the payment due on 31 July 2020 to 31 January 2021. Now anyone who needs to pay up to £30,000 in tax by 31 January 2021 can delay paying in full until 31 January 2022.
    4. VAT deferral —  Businesses who chose to defer VAT payments between March and June 2020 will now be able to make interest-free payments over the 2021-22 tax year, rather than paying in full by March 2021.

Have an eye on the long term and tax as well. Now is a good time to focus on what you can control, and also use it as an opportunity to take stock.