Support for the self-employed during the coronavirus pandemic

While the coronavirus pandemic has affected the health of hundreds of thousands of people worldwide, it has also had a devastating effect on small and medium-sized businesses in the UK and beyond.

The Chancellor has previously announced a substantial package of support for businesses, including paying 80% of the wages of furloughed workers, VAT deferrals and business interruption loans.

Following calls to help freelancers and the self-employed, the government has now unveiled a package of measures designed to support those who own their own business. Here’s a summary of the assistance that Rishi Sunak has announced.

Self-employed tax deferral

Income Tax payments due in July 2020 under the Self-Assessment system may be deferred until January 2021.

You are eligible if your self-assessment ‘payment on account’ is due to be paid on 31 July. It’s an automatic offer and so you don’t have to apply for a deferral. You won’t pay any penalties or interest for late payment if you decide to defer your payment until 31 January 2021.

Note that the deferment is optional. If you are still able to pay your second payment on account on 31 July 2020 you should do so.

Self-Employed Income Support Scheme

After announcing a support package for employed people, the Chancellor was keen to assure self-employed workers that they had not been ‘forgotten’.

The Self-Employment Income Support Scheme will pay a taxable grant to self-employed people equivalent to 80% of their average monthly profits over the last three years, up to £2,500 a month.

Rishi Sunak confirmed that the scheme would be open for at least three months, with the possibility that it will be extended.

The grant will apply to any self-employed workers across the UK who:

  • Have trading profits of up to £50,000
  • Make the majority of their income from self-employment
  • Filed a tax return in 2019 and are already self-employed. To help more people access the scheme, the government confirmed that HMRC has extended the tax return deadline for another four weeks to enable self-employed workers to submit a tax return.

The three months’ income will be paid as one lump sum in June.

The Chancellor said that 95% of people who are ‘majority’ self-employed will benefit and that the 5% the scheme doesn’t cover have an average income of £200,000. These are the steps, he said, to “make this scheme deliverable and fair.”

The scheme essentially covers the same amount of income as for furloughed employees, although has been more difficult to implement because the self-employed are a ‘diverse population’.

If you have less than three years trading accounts, then HMRC will look at ‘what you have’. If you are ‘very recently self-employed’ you will not be eligible for the scheme.

The government hopes that the scheme will be available at the start of June. Workers will have to complete an online form in order to access the grant, which will be paid straight into your bank account.

The Chancellor also confirmed that self-employed workers can also access business interruption loans, for which there have already been 30,000 enquiries.

Universal Credit

Self-employed workers who have seen a significant reduction in earnings are able to claim Universal Credit, providing you meet the usual eligibility criteria.

To support you with the economic impact of the pandemic and allow you to follow government guidance on self-isolation and social distancing, the requirements of the Minimum Income Floor will be temporarily relaxed.

Mortgage payment holidays

The government has announced that mortgage payment holidays of up to three months are available to all homeowners who are up to date on their mortgage payments.

They’re also available to Buy to Let landlords whose tenants have been financially affected by the coronavirus. Landlords who take payment holidays are expected to pass on this relief to their tenants.

Payment holidays are available to any homeowners who are concerned about their ability to meet their mortgage repayments, for example due to a loss of work or other changes in their circumstances.

Note that you will still owe the bank the same amount as you do now, but interest will continue to accrue on this. This means it will take you longer and cost you a little more to clear your mortgage.

Your lender will not require you to provide any documentation or undergo any affordability tests.

HMRC Time to Pay service

If you’re self-employed, struggling with your finances, and have outstanding tax liabilities, you may be eligible to receive tax support through HMRC’s Time to Pay service.

These arrangements are agreed on a case-by-case basis and are tailored to your individual circumstances and liabilities.

If you have missed a tax payment or you might miss your next payment due to Covid-19, please call HMRC’s dedicated helpline on 0800 0159 559.

Changes to Income Tax and National Insurance could follow

In this speech, the Chancellor was at pains to point out that the support for self-employed individuals was comparable to employed workers. Taking this into account, Rishi Sunak hinted that self-employed people may, therefore, pay more tax in future.

The Chancellor said: “If we all want to benefit equally from state support, we must all pay in equally in future. It is just an observation that there is currently an inconsistency in the tax treatment of the employed and self-employed”.

Watch this space!

Coronavirus – It’s ok to be scared

Coronavirus – It’s ok to be scared

Its ok to be scared, being scared means you are about to do something really, really brave.

When we mention “brave” what do we mean?

The world is watching with concern the spread of the new coronavirus. The uncertainty is being felt around the globe, and it is unsettling on a human level as well as from the perspective of how markets respond.

You are probably reading/listening to the news (Negative Events World Service) and want to sell all of your investments and go to cash because that feels safest.

It is a fundamental principle that markets are designed to handle uncertainty, processing information in real-time as it becomes available. We see this happening when markets decline sharply, as they have recently, as well as when they rise. Such declines can be distressing to any investor, but they are also a demonstration that the market is functioning as we would expect.

We can’t tell you when things will turn or by how much, but our expectation is that bearing today’s risk will be compensated with positive expected returns. That’s been a lesson of past health crises, such as the Ebola and swine-flu outbreaks earlier this century, and of market disruptions, such as the global financial crisis of 2008–2009. Additionally, history has shown no reliable way to identify a market peak or bottom. These beliefs argue against making market moves based on fear or speculation, even as difficult and traumatic events transpire.

So, we are asking everyone to be brave and hold on. This is short term volatility and in the medium-term things will return to near normal. Coronavirus will disperse and markets will return. Click HERE for link to timing the markets

Trust in the markets to do what they do best and ride out the storm.

We need to take a long term view and try to not worry about the short term as you can see in the picture above.

Its normal to think the way you are thinking, its only human. I am here to ensure that you don’t do the wrong thing, at the wrong time and for the wrong reason.

Remember is ok to be scared but ensure you stay brave during that time.

If you have any concerns or questions, please do not hesitate to call us.

We have set up a booking system for anyone to call with concerns over their finances and the current market news. You don’t have to be a current client this open to all.

This is a free reassurance call

Please click the links to Gareth, Shane’s, James and Gavin’s diary to book a call.

Book with Gareth

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This is what a lot of people do when the markets show volatility. The secret is to be brave and hold on.

Images courtesy of behaviour gap

Coronavirus and the markets

Coronavirus and the markets

In recent weeks, the coronavirus has never been far from the headlines. At the start of March, there were more than 87,000 confirmed cases of Covid-19 with almost 3,000 deaths. While the vast majority of the cases and fatalities have been in mainland China, the virus has now spread to more than 60 countries.

One of the most immediate consequences of the coronavirus outbreak has been the impact on global stock markets.

Last week saw a fall of 11% in the value of shares in London, and a fall of 8% in New York. Other markets around the world have also seen sharp falls. While you may be concerned about the short-term volatility of the markets, it’s important to remain calm and focused on your goals.

Why are the markets reacting in this way?
  • The closure of Chinese factories has led to concerns about production in the rest of the world. Apple has already warned over the impact of shutdowns in China, while carmaker Jaguar Land Rover has been flying parts out of the country in suitcases. Shortages of components will almost certainly have a knock-on impact in the West.
  • A reduction in travel. A travel ban means Chinese tourists are staying at home, while many major carriers have warned of a severe reduction in demand. EasyJet and the owner of British Airways have announced emergency measures, including cancelling flights, changing the size of planes used on routes and freezing pay.
  • A reduction in global demand. Dozens of companies, from mining firm Rio Tinto to software giant Microsoft have reported that they will not hit sales targets in 2020.
Lessons from previous epidemics

Earlier this year, Charles Schwab research looked at the impact of previous epidemics on world markets.

Considering outbreaks including SARS, H1N1 Swine Flu and Ebola, the conclusion was simple:

“The global economy and markets have been relatively immune to the effects of past viral epidemics — even when the global economy was especially vulnerable to a shock. A short-term dip in stocks tended to be followed by the continuation of the upward trend… investors may have little need to take action if their portfolios are diversified and aligned with their long-term plan.”

Keep calm and carry on

Whenever you invest in equities, short-term volatility is something that you have to expect. Everything from inflation figures to Donald Trump’s social media updates can affect what happens to markets, and so on any given day or week, there is a chance that prices will fluctuate in the short term.

However, over time, stock markets tend to provide growth. The chart below shows the value of the FTSE100 over the last five years. You’ll see that the closing level at the end of February is still significantly higher than the value of the index just four years ago.

Source: London Stock Exchange

It is always worth remembering that saving is a long-term objective.

As Mark Fawcett, the Chief Investment Officer of auto-enrolment pension provider Nest says: “Pension saving is a long game – people can be saving for up to 40 or even 50 years, so it’s important to keep looking at the bigger picture, rather than short-term events.

“Younger savers should comfortably ride out short-term fluctuations and at Nest we take steps to protect members’ pots as they get closer to retirement and are more likely to need their money sooner.”

  • Your goals are likely to be the same as they were a week or a month ago. Our investment strategies are designed with the long term in mind, and this naturally considers periods of both positive and negative returns.
  • You have a diversified portfolio. The fall in the value of the FTSE 100 is not the same as the fall in the value of your portfolio. Our clients have diverse portfolios that include exposure to other asset classes, for precisely this type of situation.
  • Now is the worst time to panic. While our emotions might take over at this time, reacting to a fall in the markets can be a disaster. You potentially turn a paper loss into a real loss, and a range of studies have found that this is one of the main reasons why investors lose money.

Short-term stock market volatility is normal. While it may feel difficult now – we certainly feel this too – it is part of a long-term investing strategy.

The final word goes to Charles Schwab who, earlier this year, undertook research into previous disease pandemics and their impact on the global economy. Their conclusion was:

“The global economy and markets have been relatively immune to the effects of past viral epidemics – even when the global economy was especially vulnerable to a shock. A short-term dip in stocks tended to be followed by the continuation of the upward trend.”

If you have any queries about the impact of Covid-19 on investments and pensions, please get in touch.

5 ways to improve your work/life balance

Juggling the demands of a busy career with the need to relax and spend time with loved ones can be difficult.

The 24/7 availability of the internet might have given you the flexibility to work on the train or receive instant responses from colleagues across the globe, but it can also bring with it a creeping temptation to check your work emails at home, or to Skype the office from your luxury holiday villa.

Striking a healthy balance between work and downtime is crucial to your physical and mental wellbeing, and can also improve your efficiency and productivity at work.

Here are five ways to improve your work/life balance.

1. Be realistic

You might be searching for a perfect balance. You might even have an idea of what that looks like. But is it realistic?

Modern life can be complicated. You’ll likely have multiple parties vying for your attention at any one time and splitting your time equally between each might not be possible – or even desirable.

A promotion at work, or a period of business expansion, might mean you’re busier for a few months. Equally, the demands of a busy home life or a change in personal circumstances could impact on your ability to work.

Think of work/life balance not as a daily fifty-fifty split but as something to achieve over a week or a month, or even a year.

Seen in the context of a longer period you might see patterns – areas when you can claw back some personal time or give more to work.

2. Switch off and unplug

What you can do daily is give yourself a distinct cut-off between home and work.

However busy you are: regardless of what time you leave the office, once you get home, it’s important to switch off, physically and emotionally.

Research commissioned by Mind has found that work is ‘the most stressful factor in people’s lives with one in three people (34%) saying their work-life was either very or quite stressful, more so than debt or financial problems (30%) or health (17%).’

If you’re tempted to check your work emails at home, don’t. Switch off the Wi-Fi if you have to. Your evenings should be for winding down – whether that’s spending time with family and friends, enjoying a hobby, or simply relaxing.

Read a book. Research conducted in 2009 found that just 30 minutes of reading is as effective as yoga for reducing stress. If you don’t like reading, try yoga!

The important thing is to find something that you enjoy, that relaxes you, and that has nothing to do with work.

You’ll feel the benefits on the next day’s commute.

3. Take a break

Taking regular breaks during the working day is important. Even one half-hour lunch break, away from the office and preferably in the fresh air, will recharge your brain.

A recent report in the Harvard Business Review urges employers to build regular breaks into the working day as our brain can only focus ‘for around 90 to 120 minutes before it needs to rest.’

Lack of rest can lead to stress and burnout, a problem that ‘costs the U.S. more than $300 billion a year in absenteeism, turnover, diminished productivity, and medical, legal, and insurance costs,’ the report concludes.

Time out means that you can return to work invigorated – and maybe with a fresh perspective.

The light exercise of a lunchtime walk, or the calming effect of a three-minute meditation, might seem like a small step, but build them into your daily routine and they will become a habit.

Longer-term, be sure to take a holiday.

UK law entitles those working a five-day week to 28 days holiday a year and yet, according to recent research from HR Management firm BrightHR, 77% of UK workers still have unused holiday leave. In addition, 59% of employees say they have no option to carry over their leave until next year, and so not using annual leave often means people lose it.

It doesn’t matter whether you stay at home on the sofa or head for that luxury holiday villa, as long as you leave your work laptop behind.

Whether a day off or a two-week break, forget work while you’re away and allow yourself the much-needed opportunity to recharge.

4. Busyness doesn’t equal success

A successful career can seem all-consuming. Finding the time to unwind is crucial for your health and wellbeing but it can also benefit the business as a whole.

Businesses that promote a healthy work/life balance may find they have less stressed, and more focused, staff. That can lead to some, or all, of the following benefits:

  • Better staff retention
  • Increased productivity
  • Increased morale
  • Higher employee engagement
  • More profits

Take control of your work/life balance and do your best to ensure your company understands the benefits too.

A 2017 University of Bristol study found that happy workers were up to 10% more productive, so staff with a good work/life balance might just be better staff.

5. Prioritise your health

It should go without saying but your physical and mental health should be your main priority.

Recognise the signs of physical, and mental fatigue, and take proactive steps to redress the balance. Daily exercise or meditation can help. Factor exercise into your daily routine and – where possible – don’t allow overrunning meetings or busy work periods to upset your schedule.

Also know that you can call in sick if you need to. You might have meetings or deadlines approaching but a day off work now may speed up your recovery and prevent a period of longer sickness in the future.

You will be a better employee if you’re physically and mentally healthy and part of that comes from understanding the benefits of a good work/life balance.

Get the balance right and you might begin to enjoy work more, whilst having increased time at home with your friends and family, doing the things you enjoy.

5 mindfulness apps to guide you through the day

In the everyday fight to juggle work and home life, it’s easy to neglect your mental and physical wellbeing.

Mindfulness covers a variety of ways we can learn to look after ourselves better, and whether you’re a mindfulness novice or a meditation expert, there are countless apps out there to help.

Here’s your guide to the best ones you can use to guide you through the day.

1. Waking up (Alarmy)

Often billed as the ‘most annoying’ alarm app on the market, Alarmy might not be an obvious app for our mindfulness list. Relaxing it isn’t, but it will get you out of bed and mentally active, ready to face the day.

Amongst the alarm features offered is its photo mode. Take a photograph of an item in your room or an area of your house and the app will set it as your registered image. The next morning, the only way to stop the alarm is to recreate that registered photo. Pick a far-flung corner of the house and be sure to get up and about early.

Other modes include puzzle-solving and maths questions. These brain-training modes will get your mind working, helping you start the day on the best footing, without having to wander sleepily around the house.

2. Morning routines (Habitica)

Organising your day can help you keep on top of your work/life balance and reduce stress. If you’re looking to form routines and build good habits, you might consider the Habitica app.

This free app, available on IOS and Android, looks to ‘gamify’ your habit building.

You name the positive habits you’d like to form, then set your own goals and tick them off when you achieve them. Daily tasks completed increase your score and can see you ‘level-up,’ earning in-game rewards. Alternatively, set your own ‘real-world’ rewards for meeting specified targets.

You can also earn points for avoiding bad habits.

With a Dungeons and Dragons-style aesthetic, this free app is a great way to incentivise your habit building, allowing you to have fun whilst ticking off daily goals.

The emphasis is on you to pick the habits you want to form or break, and the daily tasks you want to accomplish. Pick wisely and you may find it leads to a better work/life balance, less stress, and greater productivity.

3. On-the-go meditation (Headspace)

Headspace has been around since 2010 and is still a regular on charts naming the best mindfulness apps.

Available for IOS and Android, it is initially free to download but you may find yourself signing up for the subscription service. It’s currently £9.99 per month or £49.99 for the year.

Headspace offers quick and straightforward introductions to meditation.

Designed to be used for as little as ten minutes a day, you can use the app before starting your commute or on a lunch break, taking time out to relax with ‘on-the-go’ and ‘mini-meltdown’ sessions designed to help relieve the stresses of daily modern life.

It’s straightforward to use and a great – possibly even habit-forming – introduction to the concepts of mindfulness.

4. Relaxing after work (Calm)

If you’re looking to wind down after a stressful day at work, Calm may just be the app for you.

The app has multiple modes to increase happiness, reduce stress and build self-esteem. It was Apple’s ‘App of the Year’ in 2017, and more recently, the mindfulness app Best Buy in The Independent.

Calm offers a variety of techniques for encouraging relaxation, from music and meditation to masterclasses and exercises designed to help you achieve restful sleep. On loading up the app, you’re greeted with the soothing sound of the outdoors and other sounds are available – including crackling fires and rolling waves.

As well as ‘Daily Calm’ sessions that you can use throughout the day, the evening and bedtime features of Calm are where the app comes into its own.

Bedtime stories designed to ease you to sleep are read by celebrity contributors like Matthew McConaughey, Stephen Fry, and Lucy Liu. There are also evening and bedtime meditation sessions designed to help you drift off.

You can download the app for a free one-week trial. A yearly subscription is £28.99.

5. Better sleep (Sleep Cycle)

Both Calm and Headspace offer meditations and relaxation tips to help you drift off to sleep, but for an app that helps you understand how you sleep, try Sleep Cycle.

Set a morning alarm and this app will track and analyse your sleep, using the data it collects to wake you up slowly during the optimum time in your sleep cycle.

It also has Apple Health integration and heart rate tracking if you’re using it on an iPhone.

The sleep graphs produced by the app can help to identify factors influencing the quality of your sleep. In turn, understanding how you sleep could lead to more – and better – sleep, integral for your mental and physical wellbeing.