SEISS cash flow crisis
The Accounting Partnership has encouraged independent business owners to file their income tax returns well in advance of the Jan. 31 deadline, to give them as much time as possible to understand their financial situation and plan accordingly. He warned that 2.9 million self-employed people face the prospect of a cash flow crunch in the coming months as the deadline draws near.
Nearly three million self-employed workers whose businesses have been affected by the coronavirus may have to repay all or part of their SEISS subsidies, despite still volatile business conditions. This could have a particularly hard impact on those who have demanded from the start of the pandemic.
Some freelancers who have pressed for grant support during the coronavirus may not have been affected by the pandemic as badly as they initially thought. However, new challenges, including rising energy bills, interest rates and reductions in universal credit, could see them facing new hardships. With the added prospect of having to repay part of a previous grant, this could lead to serious credit issues.
In total, just over £ 25 billion in financial support has been leveraged by entrepreneurs, freelancers and other self-employed workers through five SEISS grants, over the past 18 months or so. The HMRC recently issued new guidelines warning that some or all of the funds may have to be repaid if they suffer less than expected – or that individuals could face a penalty.
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