We live in unprecedented times. Whilst we’re still getting to grips with the effects that the Coronavirus pandemic is having on us as individuals and our businesses, we have had many of our UK Network Marketing clients worried about the effect COVID-19 will have on their business.
On the face of it, Network Marketers don’t appear to be as badly affected as others – after all, most business owners already work from home and are used to juggling their business around other commitments. In addition, market access is guaranteed through online ordering, and direct shipping routes are – on the whole – still up and running, albeit a bit slower. Therefore, the need for social distancing is not going to cause any problems with getting stock to customers. Regular communication with customers and downlines can be conducted via video conferencing tools such as Skype or Zoom, rather than in person.
On the flipside, it is likely that discretionary spending will decrease over the next few months which will have an impact on sales.
For some industries, especially those in the health, fitness and supplement markets, the pandemic may actually result in better sales as people are looking to increase their immune systems and overall health. Some Network Marketers also see it as an opportunity to recruit new distributors as many individuals are looking for jobs they can do from home.
So what government support is available for Network Marketers?
The majority of Network Marketers are self-employed. Below you can find an overview of UK government’s support schemes:
SELF-EMPLOYED INCOME SUPPORT
This scheme provides a taxable grant worth 80% of a self-employed individual or partner’s trading profits for an initial three months.
It is based on trading profits of less than £50,000 in 2018/19, or average trading profits of less than £50,000 between 2016 and 2019. It also only applies where more than half of your total income comes from self-employment. You must also have lost trading profits due to COVID-19.
Sole traders or partners can claim up to £2,500 a month for three months and HMRC will pay the grant as a lump sum directly into a bank account.
As the scheme is based on tax returns, HMRC already has the information it needs to determine if a sole trader or partner is eligible for the grant.
The tax body will contact the individual directly and invite them to submit a claim through GOV.UK
A word of caution, however: if someone texts, calls or emails claiming to be from HMRC and asks you to click on a link or to give information, it is a scam.
If you fall into this bracket and have lost income as a result of COVID-19, more information can be found on GOV.UK
DEFERRED TAX PAYMENTS AND OBLIGATIONS
- PAYMENTS ON ACCOUNT
Anyone who has to send in a tax return for 2019/20 through self-assessment and pay income tax can defer the second batch of payments on account.
In a normal year, these are due before 31 July 2020 but can now be deferred until midnight on 31 January 2021.
- VAT PAYMENTS
VAT-registered businesses that have been affected by COVID-19 have the option to defer any payments due between 20 March and 30 June 2020.
HMRC does not need to be notified of the deferral. Simply stop the direct debit payment from the business’s bank account.
This is only a deferral, however, and any payment deferred during this period of uncertainty will need to be paid by 31 March 2021.
- COMPANIES HOUSE
Where distributors are operating their businesses through limited companies, they can apply to Companies House for a three-month extension to file their accounts.
Distributors that apply and cite coronavirus-related disruption will automatically be granted the three-month extension.
Applications can be made online and should take around 15 minutes to complete.
If you have any queries about your individual circumstances or how to access the government support available, please contact us on 01444 458252 or info@prbmp.com.