The chancellor, Rishi Sunak, has unveiled an emergency support package to protect Britain’s 5 million self-employed workers.
It will be called the Coronavirus Self-employment Income Support Scheme
Under the scheme, Self-employed people will be able to apply for a grant worth 80% of their average monthly Net profits over the last three years, up to £2,500 a month.
(If you have only completed one Tax return then it will only be based on one, if you have two then it will be based on two etc.)
Your Net profit is your total income minus your total expenses, if you claimed a large tax rebate, you will have lower net profits, than someone on a similar income who received a lower tax rebate.
The more you claimed then, the less you get now!
By the time the scheme becomes available anyone who has submitted their 19.20 return, which can be completed on the 6th of April 2020, should have those figures included in HMRC’s assessment.
To be eligible for the scheme you must:
- Have Net profits are under £50,000 a year
- completed at least one self-assessment return by the time of the eligibility assessment, if this is your first year in self-assessment then you need to get the 19.20 return filed as soon as possible.
- At least half their income needs to have come from self-employment as registered on the 2018-19 tax return filed in January – anyone who missed the filing deadline has four weeks from now to get it done and still qualify.
- Late tax filers who complete their forms in the next four weeks will also be contacted by HMRC directly. The fines that were due in May for those who did not file in January will be wiped.
Unlike the employee scheme, the self-employed can continue to work as they receive support.
The level of profit loss during the three month period would not be calculated, so whether someone lost 5% or 100% of profit because of the coronavirus, they were still entitled to an 80% grant
- The money, backdated to March, will arrive directly into people’s bank’s accounts from HMRC, but not until June.
- The grants will be taxable and will need to be declared on tax returns by January 2022.
- The support will not be available until June.
You can use this calculator to see how much you may be eligible to receive:
To stop the gap until that time the Government has said self-employed people can apply for help via the benefits system:
- Should their income dry up, they will be able to claim employment and support allowance (ESA) and/or Universal Credit. The weekly payment for ESA is typically £73.10 or £57.90 for people under the age of 25.
- The payments for Universal Credit have been temporarily raised so that the self-employed receive the same amount as someone on statutory sick pay (£94.25 a week).
- The Government has also said it will make it quicker and easier for people to access these benefits.
- Mortgage and rental holidays available for up to three months.
- Local authorities are also set to get a £500m hardship fund to provide vulnerable people with council tax payment relief.
How do I claim the help?
- HM Revenue and Customs (HMRC) will use existing information to identify those eligible and will invite applications
- The application will require them to confirm that they meet the eligibility requirements
- It will be paid straight into a bank account, which eligible taxpayers will need to confirm on their application form
- HMRC have asked that People do not contact HMRC. If they are eligible HMRC will contact them directly