General guidance for everyone, from the AOP (click to expand)
It’s without doubt that we are in unprecedented times at the moment and we know a lot of people will be finding it a challenge to rationalise the circumstances and work out where the reality sits.
We want to say that we are keeping a close eye on the situation, as you might expect, and are doing a number of things ourselves to minimise the impact on our operations and maintain our support for you.
As you may know, we are collating useful information and guidance from trusted, verified sources and are compiling links on this page. Please use these sources in preference to anything unverified or speculative.
Looking after yourself
It’s very easy in times like these to over-compensate for the feelings of anxiety and alarm that people might feel, so we want to reassure those of you that are perhaps feeling overwhelmed and suggest a few steps you might take to create some much-needed space for yourself:
- Take a decent break from the news, particularly the health-related stuff and limit yourself to checking it less often. If you find your anxiety levels are ramped up, you may also be worried about missing something, so perhaps ask a friend, colleague or family member to let you know if there’s something important you should be aware of.
- Stay away from Google and general social media ‘advice’, and don’t rely on message boards and forums for advice as often, those places will give you a polarised or skewed view of things.
- Do some regular exercise, even for just twenty minutes, and focus your mind on something else, even if it’s something simple at home in your living room or concentrating on your breathing, you’ll find there are benefits to be had.
- Try not to seek reassurance all the time about the situation. Yes, it is quite a shift from our usual pattern of life, but it will come to an end and business as usual will return. Believe the science and rely on facts – you won’t go far wrong with that approach.
- If you do feel anxious, remember that the feeling is a normal response to extraordinary circumstance and is not permanent. It will stop and you will regain your calm and your sense of perspective.
- Use any extra spare time you might have to do things that will give you a sense of achievement, regardless of what it might be, whether it’s something as simple as re-ordering your image catalogues, weeding out your old emails or learning some new skills online.
- Keep in touch regularly with your friends, family and/or loved ones, no matter how briefly – it helps us all feel that bit more connected.
If you do think you have picked up the virus and are suffering from any of the following symptoms;
• fever or a high temperature (i.e., above 37.8° C)
• new, persistent cough
...then you should stay at home, rest, and follow the advice of Public Health England and the NHS. Remember that for most people, Coronavirus (COVID-19) will manifest as a mild infection. There are groups of people for whom things may well be more serious, and if you are in one of those groups, you may need to take more action, such as going online to https://111.nhs.uk or calling 111, which is your first step if you do need more guidance or clinical advice and are more unwell. Obviously, in an emergency, call 999.
Lots of photographers are reporting having shoots cancelled or postponed. We know how difficult it can be managing one’s self-employment, even without these extraordinary circumstances, and it may be tempting to try to carry on regardless. It’s important to remember that although for many, being ill will not be that serious, for lots of people, it may be and we all have a responsibility to protect those who may be more vulnerable and to slow down the rate of infection, so our public health services are not overwhelmed.
If clients want to postpone or cancel shoots, there may be ways of carrying on production through remote working, such as using Zoom or Skype to facilitate meetings, or by using FaceTime or WhatsApp video to allow clients or art directors to see the photography taking place and Capture Pilot (for Capture One users) or web galleries to allow clients to make selects and/or approve shots before final output.
This is a tough one – you and your clients are likely to be in the same boat for a start, so enforcing cancellation clauses should be approached with some discretion and on a case-by-case basis, dependant on how what was in your contract and terms of business, how much notice you’ve been given and what alternative arrangements have been suggested. For those of you that have access to business & legal support, please do make sure you use the services we provide as and when you need to.
Managing existing and current work
We suggest that now more than ever, you do all that you can to keep hold of your own cash – if clients want something paid for, up front, for a commission, you really need to make every effort to get your client to advance you that amount, or for them to pay for it directly. Cash-flow is more important than anything in running a business, and when there’s greater uncertainty, keep your purse or wallet closed for as long as possible. If you are discussing new work, make sure that the terms of engagement include a clause about advance payments for any expenses you may incur before you can invoice.
We will continue to provide as much solid information and support as we are able and wish you the very best.
Seamus, Yaa, Rachel, Kevin, Sam and Nick - your AOP team.
Breakdown & analysis of UK Government support for business (click to expand)
(Please be aware - this is a lengthy piece!)
UK Government support – what there is and what it means – correct at 29 March 2020
The following is a list of the current level of UK Government support available. We recognise that there are still gaps and we are doing what we can to address this as a matter of urgency as we know many of you will still fall between the stools.
The contents are as follows:
1. Self-Employed Income Support Scheme (SEISS)
2. Filing accounts with Companies House
3. Coronavirus Job Retention Scheme
4. Coronavirus Business Interruption Loan Scheme (CBILS)
5. Limited companies with sole directors
6. Deferred VAT payments
7. Self-assessment income tax
8. Universal Credit
9. Time to pay – HMRC
10. Business rate relief
NOTE: There are likely to be plenty of scams surrounding this support, so you should only access these schemes through official Gov.uk websites or webpages.
DO NOT CLICK ON LINKS IN EMAILS, TEXT MESSAGES OR HAND OVER YOUR DETAILS OVER THE PHONE.
1. SELF-EMPLOYMENT INCOME SUPPORT SCHEME (SEISS)
Similar to the Coronavirus Job Retention Scheme, the Government (through HMRC) will pay self-employed people (Definition: this means sole traders and partnerships) a taxable grant worth 80% of average monthly profits over last three-years, up to a maximum of £2,500 per month.
The Scheme will be open to any sole trader/partnership with averaged annual profits of up to £50,000 and although the Chancellor stated this covers 95% of all self-employed people, we know that many photographers will fall through the net as they are the sole director of their limited company and are thus ineligible.
This scheme will be extended if required, past the 3-month term originally announced.
To qualify, your self-employed trading profits must be less than £50,000 and more than half of your income must come from self-employment.
This is determined by at least one of the two conditions below being satisfied:
1. Having trading profits/partnership profits in 2018/2019 of less than £50,000.
2. Having average trading profits in 2016/17 to 2018/2019 of less than £50,000.
If you started trading between 2016-2019, HMRC will only use those years for which a tax return was filed.
Only those in self-employment AND who have filed a tax return for 2019 are eligible.
If you previously failed to file on time (i.e. by 31 Jan 2020), HMRC have extended the deadline to 23 April 2020, in order to qualify for the Scheme.
You must also be trading in the financial year 2019/2020 and be trading when you apply, (or would be under normal circumstances, COVID-19 excepting).
You must have lost trading/partnership trading profits due to the COVID-19 pandemic.
For those who are self-employed and have other income, you can only claim if the majority of your income is from self-employment.
There is more info here and you cannot apply for this as yet (at 29 March 2020). Additionally, HMRC will contact you and invite you to apply online.
2. FILING ACCOUNTS WITH COMPANIES HOUSE
You can now apply for a 3-month extension to file your accounts at Companies House during the COVID-19 pandemic. You must make this application before the original filing deadline.
Companies House and the FRC (Financial Reporting Council) have confirmed that all companies with imminent filing deadlines – predominantly 30 June 2019 year-ends which are due for filing by 31 March 2020 – will be granted a three-month extension assuming an application is made.
If you are in the situation that your annual accounts are not yet finalised and may not get completed by the filing deadline, you must still contact Companies House. However, they are automatically accepting COVID-19 as a reason and providing a three-month extension.
You will need to tell them:
- the company number
- an e-mail address
- a statement that you are extending due to COVID-19 or Coronavirus
You can do this here.
NOTE: It is critical that the application is made before the deadline or it will be rejected.
If you have passed the filing deadline and are receiving notices concerning the overdue accounts, it is always recommended that you contact Companies House to explain the circumstances behind the delay. If COVID-19 or Coronavirus is a factor, you should let them know this. You can email them at: email@example.com
3. CORONAVIRUS JOB RETENTION SCHEME
For all employees who are on a company payroll but with no work to do, the Government will pay 80% of their basic salary up to £2,500 per month. The Government will also give employers the ability to top-up the salary to 100%. All businesses are eligible for this scheme.
In order to access this scheme, businesses will need to:
1. Designate affected employees as ‘furloughed workers,’ and notify the employees of this change. Changing the status of employees remains subject to existing employment law and, depending on the employment contract, may be subject to negotiation.
2. Submit information to HMRC about the employees that have been furloughed and their earnings through a new online portal.
Note: You can ‘furlough’ yourself as the employee of your own limited company, but you are not allowed to undertake any work aside from any legal and regulatory duties you may have as the single company director.
The Government has pledged these measures will be in place for 3 months and be available by the end of April but will be effective from 1 March 2020.
Note: You are responsible for making contact with HMRC and instigating the furloughing of your employees – HMRC will not get in contact with you.
HMRC are now working to set up a system for reimbursement and will publish further guidance here as soon as it’s available. More info here.
4. CORONAVIRUS BUSINESS INTERRUPTION LOAN SCHEME (CBILS)
To support small and medium-sized business, the Government is extending CBILS. This will be administered through the British Business Bank and is due to launch in the week commencing 23 March.
The scheme provides the lender with a Government-backed guarantee against the outstanding balance. The limit of funding has increased to £5M for companies with a turnover of less than £45 million.
The loan terms are from 3 months up to 6 years for loans and asset finance and up to 3 years for revolving facilities and invoice finance.
The Government will cover the first 12 months’ of interest payments, so businesses will benefit from lower initial repayments. The business remains liable for repayments of the capital.
To be eligible for support through CBILS, the business must:
- Be UK-based, with turnover of no more than £45M per year
- Operate within an eligible sector (a small number of sectors are not eligible for support or subject to limitations – go here for more info.
- Be unable to meet a lender’s normal lending requirements for a normal, fully-commercial loan or other facility, but would be otherwise considered viable in the longer-term
5. LIMITED COMPANIES WITH SOLE DIRECTORS (also known as Personal Service Companies)
Many of you will have your businesses set up as limited companies, of which you are the sole director (and also, technically, the sole employee). These are known as 'Personal Service Companies' (PSCs). Unfortunately, the Self-Employment Income Support Scheme does not apply to you if you are in this situation. This is unacceptable and we are doing what we can to redress this, along with pressure from many other lobbying organisations, unions and pressure groups. All you can access at the moment, are the following measures:
- Business interruption loan (CBILS).
- Deferred VAT payments.
- Accounts filing extension.
- Time to pay arrangements with HMRC.
- Universal Credit.
- Rate relief (assuming you are a qualifying business).
- You can ‘furlough’ yourself, as the sole director and employee, but you are not allowed to do any work aside from directorial duties (filing accounts, company paperwork, that type of thing). You cannot be photographing, marketing, or otherwise looking for work – you are, in effect, on ‘pause’.
6. DEFERRED VAT PAYMENTS
Business VAT payments for the next quarter (20 March until 30 June 2020) will be deferred until the end of the year. This is an automatic offer – no application is required.However, if you have a Direct Debit set up with HMRC, you should probably cancel that, as otherwise HMRC may still automatically attempt to collect a payment.
7. SELF-ASSESSMENT INCOME TAX
Self-assessment income tax payers will not have to make a payment on account by 31 July 2020 and the payment will be deferred until January 2021. This is an automatic offer – no application is required, although of course, HMRC state that if you can pay, you should.
8. UNIVERSAL CREDIT
The minimum income level for UC has been removed and it has been increased by £1,000 per year. There is more detailed information on UC for the self-employed here.
9. TIME TO PAY HMRC
A dedicated helpline has been set-up to help businesses and self-employed individuals in financial distress and with outstanding tax liabilities to receive support. Through this, businesses may be able to agree a bespoke ‘Time to Pay’ arrangement.
A Time to Pay Arrangement is a debt repayment plan to HMRC for your outstanding taxes. You should have the following information to hand to help HMRC make a decision:
- Your HMRC reference number (for example, your 10-digit Unique Taxpayer Reference or VAT registration number).
- The tax liability that you are finding it difficult to pay and the reasons why.
- What you have done to try to obtain the funds to settle the liability.
- Your thoughts on how much you can pay immediately and how long you may need to pay the rest. Clearly, the longer the payment period, the more chance that HMRC will challenge the application.
- HMRC may ask for evidence, such as cash-flow forecasts, monthly management accounts or copies of bank statements, showing that you will be able to pay future instalments.
- HMRC are likely to want to understand your financial position, such as your income and expenditure and your assets and liabilities.
If you are concerned about being able to pay your tax due to COVID-19/Coronavirus, call the HMRC helpline on 0800 0159 559 or discuss the matter with your accountant.
10. RATE RELIEF
The government will provide additional Small Business Grant Scheme funding for local authorities to support small businesses that already pay little or no business rates because of small business rate relief (SBRR), rural rate relief (RRR) and tapered relief. This will provide a one-off grant of £10,000 to eligible businesses to help meet their ongoing business costs.
To be eligible for this support, your business must:
- Be based in England.
- Be a business that occupies property.
- Be receiving small business rate relief or rural rate relief as of 11 March 2020.
You don’t need to do anything to access the scheme – your local authority will be in touch with you assuming you are eligible.
[AOP/ correct as at time of writing, 29 March 2020]