Chancellor announces support for self-employed

The Chancellor has announced the self-employment income support scheme.

Under the scheme self-employed people who have been adversely affected by the coronavirus crisis will be eligible for support. The scheme is limited to those with trading profits of less than £50,000 per annum who make the majority of their income from self-employment. They can receive a taxable grant equal to 80% of their average profits over the past three years, subject to a cap £2,500 per month.

A self-employed individual or member of a partnership can apply if they:

• Have submitted their tax return for the tax year 2018-19. Anyone who did not submit their tax return by 31 January 2020 has four weeks from today to do so
• Traded in the tax year 2019-20
• Are trading when they apply, or would be except for COVID-19
• Intend to continue to trade in the tax year 2020-21
• Have lost trading/partnership trading profits due to COVID-19

The grant will be available for up to three months and will be extended if necessary.

HMRC will contact those who are eligible and they should be able to access the grant from the start of June when it will be paid in one lump sum

In a further measure to help the self-employed, the chancellor also announced that income tax bills due for payment in July can be deferred until the end of January 2021.

In the meantime, self-employed people can apply for a business interruption loan and access universal credit.

However, the chancellor said he can no longer justify self-employed people paying less tax than the employed and so this is something that is likely to change in the future.

The scheme will not cover contractors operating through personal service companies.

Further details of the scheme can be found in government guidance and FAQs.