Chancellor hands the Self-Employed their life line

The Chancellor Rishi Sunak had been criticised recently for not providing for the self-employed in his recent announcements, where his support was focused more on businesses than the self-employed.  Today he has offered a support package which raises the bar on the previously announced measures of deferring tax payments and Universal Credit.

CoronaVirus Self-Employment Income Support Scheme

If self-employed have suffered a loss in income, a taxable grant will be paid to them (self-employed or partnerships), worth 80% of their profits up to a cap of £2,500 per month.

Initially, this will be available for three months in one lump-sum payment, and will start to be paid from the beginning of June.

It is open to those who were trading in the last financial year, still trading now, and planning to continue doing so this year.

Who is eligible?

  • At least 50% of a claimant’s income needs to come from self-employment.
  • The scheme will be open to those with a trading profit of less than £50,000 in 2018-19, or an average trading profit of less than £50,000 from 2016-17, 2017-18 and 2018-19.

Anyone who has recently become self-employed and do not have a full year of accounts will not receive any help under this scheme.

How to apply?

This is how it works:

  • HM Revenue and Customs (HMRC) will use existing information to identify those eligible and will invite applications
  • The application will require them to confirm that they meet the eligibility requirements
  • It will be paid straight into a bank account, which eligible taxpayers will need to confirm on their application form
  • People do not need to contact HMRC now, if they are eligible HMRC will contact them directly

If you pay yourself a salary and dividends through your own company, you are not covered by the scheme but will be covered for your salary by the Coronavirus Job Retention Scheme if you are operating through PAYE.

If you would like to discuss this recent announcement with one of our team then please call us on 0330 22 33 660 and we will be happy to help 📞.