Last night, the Chancellor announced details of the Self-Employed Income Support Scheme which should benefit millions of self-employed individuals across the UK as the COVID-19 pandemic continues to evolve.
Further details may be announced in due course and we will continue to keep you up to date on the latest developments.
Self-employed Income Support Scheme – UK Wide
The support includes direct cash grants of 80% of average monthly trading profit over the last three years, up to £2,500 per month. The grants will be for a period of at least three months.
The scheme is open to those individuals who have either:
- a trading profit of less than £50,000 in 2018-19; or
- average trading profits of less than £50,000 from 2016/17, 2017/18 and 2018/19.
To qualify, more than half of your income in these periods must come from self-employment. If you started trading between 2016 and 2019, HMRC will use only those years for which you filed a Self-Assessment tax return.
The intervention should cover 95% of people who receive the majority of their income from self-employment. It will not apply to anyone who started trading in 2019/20 i.e. those that have started self –employment in the last 12 months.
If you are a self-employed individual or a member of a partnership, there are a number of conditions you must meet before applying. You must have:
- already submitted your Income Tax Self-Assessment tax return for the tax year 2018/19 – if you did not file your 2018/19 tax return by 31 January 2020, you now have four weeks in which to submit this, with a final deadline of Thursday 23 April 2020
- traded in the tax year 2019/20
- are trading when you apply, or would be except for the COVID-19 pandemic
- intend to continue to trade in the tax year 2020/21
- have lost trading/partnership trading profits due to the COVID-19 pandemic
HMRC will identify eligible taxpayers and contact them directly with guidance on how to apply once the scheme is operational. Individuals should not contact HMRC. Once contacted, those eligible will need to apply using an online form.
The grant will be paid as a single instalment covering the three-month period directly into the taxpayer’s bank account. Payments will begin at the start of June.
If you are not eligible for the Self-Employed Income Support Scheme, you may be eligible for Universal Credit.
You may be entitled to Universal Credit providing:
- you’re on a low income or out of work
- you’re 18 or over (there are some exceptions if you’re 16 to 17)
- you or your partner is under State Pension age – you can check your State Pension age by following this link
- you and your partner have £16,000 or less in savings between you
- you live in the UK.
You can find out more details on Universal Credit on the GOV.UK website.
Anyone who pays themselves a salary and dividends through their own company are not covered by the scheme. However, if you are operating PAYE schemes and meet the criteria of a ‘furloughed employee’ your salary may be covered by the Coronavirus Job Retention Scheme.
If you are a sole director company, it may be very difficult to argue you are ‘furloughed’, as during the furloughed period you should not be undertaking any work related to your business, including managing emails and other communications. Guidance in this respect was given in our previous business update.
HMRC are planning on issuing further details of the scheme in due course. As soon as we are made aware of these we will let you know.
NEW HMRC Coronavirus Business Helpline
We have provided details of the HMRC helpline businesses and the self-employed in previous updates. To increase capacity there is now an additional dedicated phone number 0800 024 1222.
Opening hours for the helpline will be 8am to 4pm Monday to Friday only.
Business Cash Grants: Retail, Hospitality and Leisure Businesses – Scotland
As yet, ‘self-catering’ has not been included on the list of Scottish businesses who are eligible for these grants, unlike like their counterparts in the rest of the UK. The Association of Scotland’s Self-Caterers Ltd (ASSC) are in high-level discussions with the Scottish Government in respect of the eligibility of self-catering for these grants.
If you have any queries in relation to the above, or any of the other measures that have been recently announced, please get in touch. Our partners and wider GWA team can be contacted on their usual email address and phone number. We will also be updating our Facebook, Twitter and LinkedIn accounts on a regular basis.
Information correct as of 27 March 2020