The Government introduced a new Self-employed Income Support Scheme on the 26th March 2020 to support those who are self-employed during the current COVID-19 crisis.
The Scheme seeks to allow eligible self-employed individuals, including partners, to receive a grant of cash of 80% of their usual monthly trading profit. This amount is calculated based upon the average monthly trading profit over the last three years, capped at £2,500.00 a month. These figures offer the same level of support as that offered to those in work through the Coronavirus Job Retention Scheme (see our blog on Furloughed Workers for more information).
In order to be eligible under the new Scheme, the following requirements are to be met;
1. The individual is to have had a trading profit of less than £50,000.00 in the 2018/19 tax year, or the average trading profit over the last three tax years must be less than £50,000.00 per annum;
2. More than half of the individual’s income must be through self-employed work over the relevant period above; and
3. The individual must already be self-employed.
The assessment for eligibility will be carried out by HMRC and payments will be made as a single lump sum payment to cover March 2020 – May 2020. The current guidance states that individuals should not contact HMRC themselves, but that HMRC will identify eligible taxpayers and contact them directly with further guidance on how applications for the grant can be made once the Scheme is operational. It is anticipated that grants will begin to be paid from the start of June 2020.
Self-employed individuals may benefit from other measures in the meantime which have been announced by the Chancellor including Universal Credit, VAT deferrals and support for renters and mortgage holidays.
HMRC are continuing to provide guidance on this scheme. For more information, see https://www.gov.uk/government/news/chancellor-gives-support-to-millions-of-self-employed-individuals
O’Donnell Solicitors advise on all aspects of your Employment Law needs. For further advice at this time on what the current changes mean for you and your business, contact Suzzanne Gardener on email@example.com or on 01457 761 320.