Covid-19: Government support for the self-employed

The latest breaking news about Government support regarding Covid-19 is support measure for the self-employed:

Claim a grant through the coronavirus (COVID-19) Self-employment Income Support Scheme

The scheme is open to the self-employed (sole traders or members of partnerships) with either a trading profit of less than £50,000 in 2018/19, or an average trading profit of less than £50,000 over the 2016/17, 2017/18 and 2018/19 tax years.  These profits must constitute more than half of an individual’s total taxable income.

This scheme also applies to profits from a partnership.

Under the scheme individuals will receive a taxable grant representing 80% of average earnings over the past three years up to £2,500 per month, for a current maximum period of 3 months – this may be extended if necessary.  Payments are expected to be made in June and will be backdated to 1st March 2020.  A single grant payment will be made into the applicant’s bank account.

Unlike the support scheme for furloughed employees, self-employed individuals may continue to undertake business if this is practically possible.

HMRC will contact all eligible people and applications for the grant will be made online.  HMRC will use the 2018/19 tax return submissions as the basis for eligibility – IMPORTANT – if the 2018/19 return is outstanding it must be submitted by 23 April 2020 in order to be eligible for this scheme.

If the individual started their business in the last three years, HMRC will undertake the averaging over the years where returns have actually been filed.   The scheme is not open to individuals whose business commenced after 6 April 2019.

Notes:

• The self-employed are not required to pay their 31 July 2020 income tax instalment until 31 January 2021
• The self-employed may also access the Coronavirus Business Interruption Loan Scheme.
• The self-employed may also access increased amounts of Universal Credit.

If you have any questions please contact us at DTE to discuss these measures further.

We expect further updates from HMRC in the upcoming days so stay tuned with us to be informed as new information is released.

This document was originally published on https://www.dtegroup.com/news/blog/covid-19-government-support-for-the-self-employed. Please visit our website for the most up to date information and advice for businesses relating to Covid19.