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.
If you have questions contact Ami Naru, Partner and Head of Employment.
Alternatively, call 0113 258 0033 or email advice@travlaw.co.uk
This article was originally published on: 27 March 2020
