On Thursday 26 March, the Chancellor Rishi Sunak outlined a radical package to assist the self-employed who are affected by Coronavirus, in the form of a Self-employed Income Support Scheme (the Scheme). Although full details of the Scheme are yet to be released, here is what we know so far.
Who can apply?
The Scheme will be open to those self-employed individuals and members of partnerships who:
- have submitted their Income Tax Self-Assessment tax return for the tax year 2018-2019;
- traded in the tax year 2019-2020;
- are trading when they apply, or would have been if not for Covid-19; and
- intend to continue to trade in the tax year 2020-2021.
To qualify, an individual’s trading profits must be less than £50,000 per annum and at least half of their income must derive from self-employment. This will be determined by reference to trading profits in the 2018-2019 tax year or average trading profits over the past three years. Those who have not yet filed their 2018-2019 tax return will be given an extra four weeks, until Thursday 23 April 2020, to do so.
It appears, therefore, that those who are recently self-employed will not qualify for the Scheme. Unlike with the Job Retention Scheme, there is also no requirement for self-employed individuals to stop working.
How much can you claim and when?
Self-employed individuals will be able to claim a taxable grant worth 80% of their trading profits up to a maximum of £2,500 per month for the next three months. Trading profits will be calculated using the average profits over the past 3 years or a lesser period where the business has not been trading for that long.
The Scheme is expected to be up and running by the end of June 2020 and payments will be backdated to 1 March 2020 to cover March, April and May. HMRC will contact individuals who are eligible for the Scheme and invite them to make an application online.
We will be monitoring the Scheme and will provide updates as the situation evolves. If you have any questions about this, or any other employment matters, please contact Linky Trott or any member of the Edwin Coe Employment team.
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Please note that this blog is provided for general information only. It is not intended to amount to advice on which you should rely. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content of this blog.
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