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Help for the self-employed during the coronavirus outbreak

The Chancellor has just made his statement on the scheme to support self-employed people during the Coronavirus outbreak.  The new Self-Employed Income Support Scheme will deliver a taxable grant of up to £2,500 for a maximum of three months (although this may be extended if needed).  The level of grant will be determined based on 80% of the average monthly profits of the self-employed person for the last three years (or for the number of years they have accounts for if less).

This scheme also applies to members of partnerships.

Those who pay themselves a salary and dividends through their own company are not covered by the scheme but will be covered for their salary by the Coronavirus Job Retention Scheme if they are operating PAYE schemes.

The scheme will be limited to those who meet all of the following conditions:

  • They have trading profits of up to £50,000 per year
  • They derive the majority of their income from self-employment
  • They have filed a tax return as self-employed for the 2018/19 tax year

This can be with reference to at least one of the following conditions:

  • Trading profits and total income in 2018/19
  • Average trading profits and total income across up to the three years between 2016-17, 2017-18, and 2018-19.

See full details here: https://www.gov.uk/government/news/chancellor-gives-support-to-millions-of-self-employed-individuals

What do you do if you haven't filed your 2018/19 tax return?

There is a window of opportunity for those who have not yet filed their 2018/19 tax year – if they file within the next four weeks they will still qualify for the scheme.  Contact us if you need support with this. There is though no support available for those who became self-employed after the 2018/19 year.

When will this scheme be available?

The expectation is that the scheme will be available from the beginning of June and if grants are paid then recipients will receive their three months payments in one go.  HMRC will contact those who are eligible directly.  Those eligible will need to provide a limited amount of information and will then be paid a grant directly by HMRC.

Before the grant payments are made, the self-employed will still be able to access other available government support for those affected by coronavirus, including more generous universal credit and business continuity loans where they have a business bank account, as well as income tax and VAT deferrals, £1 billion more support for renters and access to three-month mortgage holidays.

Watch Paul Brown, Tax Partner give an overview of this latest announcement:

 

How can we help?

We are here to help. Contact your usual WR Service Delivery Manager in the first instance to discuss or visit our Contact Us page.

 

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