Coronavirus – Comprehensive Summary of Help For Self-Employed

Rishi Sunak, the Chancellor of the Exchequer, has this evening announced a comprehensive support package for self-employed workers.

As widely anticipated, the Coronavirus Self-Employment Income Support scheme will provide self-employed workers with a vital lifeline to support themselves and their families through the ongoing COVID-19 pandemic.

Workers will be able to apply for a taxable grant worth 80% of their average monthly profits up to £2,500 a month, subject to certain conditions;
• Profits will be averaged over the last 3 years; fewer years
for those who haven’t been trading as long;
• At least 50% of claimants’ income needs to arise from
self-employment as registered on the 2019-20 tax return;
• The scheme is open to those who earn under £50,000 a
year and;
• Business owners who operate through limited companies
aren’t eligible for this scheme and will need to claim
under the Coronavirus Job Retention Scheme
announced last week.

Unlike the employee scheme, the self-employed can continue to work as they receive support and anyone who missed the filing deadline has four weeks from now to get it done and still qualify.

It is not entirely clear at this stage how workers will obtain the grants, however we are sure that further detail will be announced in the coming days and weeks.

The cash, backdated to March, is only expected to be received in June as it will take HMRC’s software developers until then to build the system since they are already working night and day to get the employer scheme portal online before the end of April.

As the Chancellor acknowledged, unfortunately the Government are unable to support every individual and every business through these interventions and there are inevitably those who will lose out.
• It would seem that those who are new to self-
employment, i.e. commenced to trade after 6th April 2019
would not qualify for the scheme and would therefore
need to claim Universal Credit;
• Applications for Universal Credit should be made online
(https://www.gov.uk/apply-universal-credit) and although
there is currently a 5 week delay in payments
commencing, individuals can apply for an advance
payment to be made “within days” if required;
• Also, those self-employed workers who’s profit’s exceed
£50,000 will not qualify for state support;
• Finally, those who have recently changed employers and
were not on their new employer’s PAYE scheme at the
end of February would also appear to lose out as they
would not qualify for the Coronavirus Job Retention
Scheme.

Other actions that people can take, especially those who do not qualify for the schemes include;
• Speaking to your bank about taking a mortgage / loan
repayment holiday;
• If you rent your home, speak to your landlord about a rent
holiday or deferment. Landlords are unable to evict you
for the next 3 months;
• Even if you claim under the scheme, you may also be
eligible to Universal credit which can help with housing
and other costs;
• Deferring VAT and income tax payments as announced
last week;
• Approaching your bank for a Coronavirus Business
Interruption Loan.

Leave a Reply

Your email address will not be published. Required fields are marked *