This afternoon Rishi Sunak, Chancellor of the Exchequer, announced that the vast majority of the self-employed workforce would be entitled to a cash grant of 80% of their profits up to a maximum of £2,500 per month.
As with the Job Retention Scheme, the new Self-Employed Income Support Scheme is initially intended to run for three months between March and May.
However, HMRC will need time to build the mechanisms to facilitate the payment of the grants. As a result, the intention is that the three-month grant will be in be paid in a single lump sum and the expectation is that these payments will start rolling out at the beginning of June.
There are three qualifying conditions:
- The scheme will be open to those with a trading profit of less than £50,000 in 2018-19 tax year or an average trading profit of less than £50,000 in the three tax years 2016-17, 2017-18 and 2018-19;
- More than half of the income in these periods must come from self-employment; and
- To minimise fraud, only those who are already in self-employment and meet the above conditions will be eligible to apply.
For those who are yet to submit their 2018-19 tax return, there is a further four-week submission window from today. If the tax return is submitted within this deadline, it will be included in the HMRC calculation of the grant due.
HMRC will identify eligible taxpayers and contact them directly with guidance on how to apply online once the scheme is operational.
The Self-Employed Income Support Scheme also applies to members of partnerships.
However, it does not apply to those who pay themselves a salary and dividends through their own company. Rather, their salary will be covered by the Coronavirus Job Retention Scheme if they are operating under PAYE.
We are expecting more detailed guidance to be issued by HMRC imminently on the Job Retention Scheme and we will post on this as soon as we have the information.
In the meantime, if you have any questions or would like any further information, please either email firstname.lastname@example.org or book an appointment at https://calendly.com/jonathan-cooper/covid-19-support.