26 March 2020

Chancellor announces a new self-employed income support scheme

The government will pay self-employed people who have been adversely affected by the coronavirus a taxable grant worth 80% of their average monthly profits over the last three years up to £2,500 a month. This scheme will be open to people across the UK for at least three months and the chancellor is willing to extend it for longer if necessary. People will be able to claim these grants and continue to do business. The government is covering the same amount of income for a self-employed person as furloughed employees.

Due to the diverse nature of the self-employed sector the chancellor has taken steps to ensure the scheme is deliverable and fair. To make sure that the scheme provides targeted support for those most in need it will be open to anyone with trading profits of up to £50,000.

To make sure only the genuinely self-employed benefit it will be available to those who make the majority of their income from self-employment. To minimize fraud only those who are already in self-employment, who have a tax return for 2019, will be able to apply.

95% of those who are majority self-employed will benefit from this scheme.

HMRC are working on this scheme urgently and expect people to be able to access it no later than the beginning of June.  If you are eligible HMRC will contact you directly, ask you to fill out a simple online form, then pay the grant straight into your bank account. To make sure no one who needs it misses out on support, the government has decided to allow anyone who missed the filing deadline in January, four weeks from today to submit their tax return.

The chancellor recognizes that many self-employed people are struggling right now so they have made sure that support is available. Self-employed people can access business interruption loans, self-assessment income tax payments that were due in July can be deferred to the end of January 2021, and they have also changed welfare system so that self-employed people can now access universal credit in full. A self-employed person with a non-working partner and two children, living in the social rented sector can receive welfare support of up to £1,800 a month.

You can read more on the UK Government's website here.