No images? Click here On Thursday 26th March 2020, the Chancellor announced some welcome support for the self-employed to assist them through the COVID-19 pandemic. The Self-Employment Income Support Scheme can be used by the self-employed or a member of a partnership where you have lost income due to coronavirus. This allows you to claim a taxable grant of up to 80% of your trading profits, up to a maximum of £2,500 per month for the next three months. The scheme is designed to be aligned with the job retention scheme as far as possible, which was announced by the Chancellor last week. The value of the grant will be calculated as 80% of your average trading profits taken from your 2016/17, 2017/18 and 2018/19 tax returns to calculate a monthly amount. If you have been trading for fewer than three years, HMRC will use the information available to them at this current time. This will be a maximum of £2,500 per month for three months and the funds will be paid directly into your bank account in one instalment. The Chancellor announced that the payments are expected in June 2020. To qualify for the Self-Employment Income Support Scheme, you must meet all of the following criteria:
HMRC will be writing to all individuals they believe should qualify for the scheme in due course to invite them to apply online, so you are not able to apply for the scheme yourself. We do not have a timeframe for when the letters should start being issued but at this stage we believe this should be towards the end of April 2020. If you believe you should qualify and have not heard from HMRC by the end of April 2020, please let us know and we can assess your individual position. Although the Self-Employed Income Support Scheme should benefit 95% of the self-employed in the country, there will be some with profits in excess of £50,000 who will not qualify. You would also not qualify if you commenced your self-employment from 6 April 2019 as the grants are issued based on 2018/19 Tax Returns. To assist those individuals, the government has provided the following support options which have already been announced:
We would like to highlight that the Self-Employment Income Support Scheme does not apply to limited companies who rely on a small salaries and additional dividend income. For these companies, you should look to claim support available to businesses which were announced last week such as the job retention scheme. As the situation is constantly changing, we may not have all of the answers to your queries but please do feel free to contact us at DRG Chartered Accountants at any time and we will offer the support and advice we can to help you and your business through these unprecedented times. The above represents our current understanding and we will keep you informed as the situation continues to evolve or if our understanding changes. The DRG Team |