Blogs

Recently, @RishiSunak announced a world-leading scheme to support the UK’s self-employed individuals affected by the Covid-19 outbreak.

Direct Cash Grants

The self-employed will be eligible (subject to satisfying criteria) for a direct cash grant of 80% of their average monthly trading profits over the last 3 years, up to £2,500 per month. In a long-awaited step to protect individuals and businesses, Rishi Sunak has set out plans that will see the self-employed receive the grant for at least an initial 3 month period.

It is expected that this scheme will cover 95% of people who receive the majority of their income from self-employment in the UK, with the remaining 5% said to be those earning over £200,000 from their self-employed income.

Who is eligible?

Following the announcement last week of the Coronavirus Job Retention scheme, self-employed individuals waited with bated breath for a scheme with parity that would provide financial support to them in this unprecedented time.

The scheme will be open to those with a trading profit of less than £50,000 in 2018-19 or an average trading profit of less than £50,000 from 2016-17, 2017-18 and 2018-19. To qualify, more than half of their income in these periods must come from self-employment.

Cleaners, plumbers, electricians, musicians, hairdressers and many other self-employed people who are eligible for the new scheme will be able to apply directly to HMRC for the taxable grant, using a simple online form, with the cash being paid directly into people’s bank account but only after they receive a letter from HMRC who will identify eligible taxpayers and contact them directly with guidance on the application process.

Lump sum

The income support scheme, which is being designed by HMRC from scratch, will cover the three months to May. Grants will be paid in a single lump sum instalment covering all 3 months, and will start to be paid at the beginning of June.

Those who pay themselves a salary and dividends through their own company are not covered by the scheme but will be covered for their salary by the Coronavirus Job Retention Scheme if they are operating PAYE schemes.

More money

Additional support available for self-employed individuals includes a £7 billion boost to Universal Credit, income tax and VAT deferrals,  and £1 billion more support for renters and access to three-month mortgage holidays.

Further information and details of the scheme will be shared shortly by HMRC.

For advice on employment-related matters and covid19 please contact Kaajal Nathwani on 020 8363 4444.