On Thursday 26 March 2020 the Government announced help for the Self- Employed whose earnings have been impacted by the Coronavirus. At this stage we only have outline details of the rescue package.
What we know so far:-
- The scheme will pay self-employed people a taxable grant worth 80% of average monthly income, capped at £2,500 per month
- The average of income over the last three years will be the basis for the calculation (subject to the cap)
- The scheme is limited to those individuals with trading profits of up to £50k. This cap whilst imposed will still cover 95% of self-employed people.
- The self-employed income support scheme will be open to those in the UK for at least 3 months. However, the scheme is unlikely to be up and running before the end of June, so it will not help with immediate cash flow issues. Self-employed will have to look elsewhere for interim finance.
- It’s different to furlough leave, where employees cannot continue to work. Self-employed people can claim these grants and continue to do business (subject to the current restrictions in place as to what businesses can open).
- The scheme is only open to those who make the majority of income from self-employment. Therefore, if for example you are employed, but have a another job which is self-employed, you will not be eligible.
- In order to minimise fraud and people setting up as self -employed now, the scheme is only open to those who have submitted a tax return for 2019. If you did not submit your tax return by the 31 January 2020, and have not yet submitted one, you can still submit a tax return for 2019 for a further four weeks from today.
- HMRC will contact eligible self-employed people directly and pay the grant straight into their bank account after inviting them to fill out an online form.