Tax Return Support provided by UK Government in the wake of COVID 19 Pandemic


Followed by the Covid 19 outbreak, the UK Government has issued measures introducing liquidity support to UK’s businessmen, self-employed contractors and employees. These additional measures are being exercised to offer financial support to individuals facing dire consequences.

Income support plan for self-employed individuals

In order to respond to an increasing number of self-employed individuals who have recently lost a considerable portion of their income due to the Covid outbreak, the UK government has announced various financial plans that aim at supporting these self-employed people. As the financial difficulties are rising among the mass Job Retention plans have recently been issued. As per the scheme, all self-employed individuals who are eventually tax payers will receive a massive grant of 80% based on an average monthly profit. However the grants are subject to tax deductions. An individual can thus consult a Tax advisor in Reading to understand the taxable amount that will be charged later. Furthermore these self employed individuals are required to submit their Tax return in Reading by the end of January 2022.

Tax proposition for non-UK residents

Non-UK residents who are stuck in the UK because of the current lockdown and the ongoing travel restrictions will be allowed to enjoy an extended period of stay for at least another 60days till they can further establish their UK residency under statutory norms and examinations.   If an individual has to unexpectedly extend their stay in the UK and are concerned about tax residency involved in the matter, they need to look for exceptional considerations issued with regards to Covid 19 outbreak.

Tax proposition on non-UK registered companies

Non-UK incorporations which are controlled and managed in the UK may experience jeopardy with regards to their status in terms of tax residence. In nutshell directors who will be considered non-resident of UK for tax year 20-21 because of being unable to travel back to the United Kingdom are likely to face heavy consequences such as “UK exit charges” and a possibility of attaining tax residency in a different jurisdiction. If a company is in risk of losing its tax residence, the board of directors should delegate powers to individuals with UK tax residency. Of course these individuals have to be a part of the organisation facing the brunt of the crisis.

Tax authorities in the UK are publishing various guidance and norms so that corporate residency is not jeopardised. The Government will not allow any further permanent establishment.
Location: Reading, UK

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