The Chancellor announced support for self-employed individuals yesterday evening (26th March) confirming what we already knew, self-employed people are a crucial part of the UK’s workforce. This covers 95% of people who receive the majority of their income from self-employment. The Chancellor states “this gives the self-employed the same level of support as those in work.”
What does it mean to you?
- direct cash grant of 80% of their profits, up to £2,500 per month
- latest announcement in an unprecedented package of government support to protect businesses and individuals
- for at least 3 months
- worth 80% of their average monthly trading profit over the last three years
- 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
- to qualify, more than half of their income in these periods must come from self-employment
- to minimise fraud, only those who are already in self-employment and meet the above conditions will be eligible to apply
- You are not eligible if you pay yourself with a salary and dividends, if you operate PAYE scheme you are covered through Coronavirus Job Retention Scheme
How Can You Apply?
- application will be through a simple* online form with the cash being paid directly in to your bank account.
- HMRC will identify eligible taxpayers and contact them directly with guidance on how to apply
- the word simple has been used by the Chancellor, not us!
When Will The Money Be Paid?
- payments will start at the beginning of June
- grants will be paid in a single lump sum instalment covering all 3 months
- individuals should not contact HMRC now. HMRC will use existing information to check potential eligibility and invite applications once the scheme is operational.
- there is alternative support to boost household incomes which will be accessible while the new scheme is being rolled out including:
- £7 billion boost to Universal Credit
- income tax and VAT deferrals
- £1 billion more support for renters
- access to three-month mortgage holidays
- business continuity loans
If you have not submitted your Income Tax Self-Assessment tax return for the tax year 2018-19, you must do this by 23 April 2020.