Last week the Chancellor announced the Job Protection Scheme to save individuals throughout the UK from losing their employment due to the Covid-19 crisis. However, there was a distinct lack of support provided for self-employed individuals.
To remedy this, last night the Chancellor announced the Self-employment Income Support Scheme, aimed at the self-employed and members of a partnership. The scheme allows the individuals to claim a taxable grant worth 80% of their trading profit up to a maximum of £2,500 per month for the next 3 months if they have suffered loss of trading or income due to Covid-19.
This grant will be worked out by adding together the total of your trading profits from 2016/17, 2017/18 and 2018/19 (where applicable) and dividing them by three to calculate a monthly amount. This grant will be paid directly into your bank account.
Who can apply?
To be eligible to apply individuals must:
- Have submitted their income tax self-assessment tax return for the tax year 2018/19
- Be trading when you apply, or would have been trading had it not been for Covid-19
- Intend to continue to trade in the tax year 2020-21
- Have lost trading/partnership trading profits because of Covid-19
- Have trading profits less than £50,000
- Have half of your income come from self-employment
HMRC will be using the data provided in the 2018/19 tax returns that have already been submitted to identify those who are eligible, and will risk asses any late returns filed before the 23 April 2020 deadline in the usual way.
How to apply
The scheme isn’t open for applications yet. HMRC will first be contacting individuals who are eligible for the scheme and will invite them to apply online.
This scheme, along with the already announced six-month delay for tax payments, will go a long way to put the self-employed minds at rest after weeks of uncertainty. There are, however, some oversights in the announced scheme, for example, those who are recently self-employed and do not have a full year of accounts will not receive any help on this scheme. In addition, those eligible for the scheme may have to wait months to receive their grant and may have to sign up for an advanced universal credit payment in the meantime.
With further details on the scheme expected to be released on the HMRC website tonight, we will keep you updated.
How Blaser Mills Law can help your business
We have been and continue to advise businesses on their employment and HR strategy and planning. If you would like a video call with one of our employment lawyers please contact James Simpson, Head of Employment, on 01494 478689 or at firstname.lastname@example.org