“These last 10 days have shaken the country and economy like ever before” – Chancellor Rishi Sunak.

This evening Chancellor Rishi Sunak has announced the government will pay self-employed people a taxable grant based on their previous earnings over the last three years, worth up to 80% of earnings, and capped at £2,500 a month.

This should cover up to 95% of the five million self-employed people in the UK, earning an average of £781 a month.

As predicted in one of our earlier Covid-19 posts, we were expecting a scheme like this, but at the time had no details or confirmation.

There is criteria to be eligible:

  • Must have submitted a tax return for 2018/19 (if you missed the January deadline you now have 4 weeks to get it in)
  • Self employed trading profits of up to £50,000
  • The majority (at least half) of your income must come through self employment.

The grants will be taxable, and will need to be declared on tax returns by January 2022.

 

Questions you may have…

I’ve recently become self employed, am I eligible?

The scheme does not cover people who only became self-employed very recently (do not have self employment income for the tax year 2018/19) you will have to look to the benefits system for support.

How do I claim the help?

HM Revenue and Customs (HMRC) will use existing information to identify those eligible and will invite those that are to apply to confirm that they meet the eligibility requirements. Once approved, the money will be paid directly into your bank account as provided on the application form.

You do not need to contact HMRC, and be aware that some people may try to impersonate HMRC to obtain your personal details.

When I will receive my grant?

The government are trying to set this up as quickly as possible, but expect payments will be made no later than the beginning of June, backdated to March.

How long can I access the Coronavirus Self-Employment Income Support scheme?

Initially, this support will be available for three months, but will be reviewed and extended if necessary.

Can I still work whilst receiving the Coronavirus Self-Employment Income Support scheme?

Unlike the employee scheme, the self-employed can continue to work as they receive support.

How do I apply for Universal Credit?

Click here to apply.

You’ll get your first payment around 5 weeks after applying online if your application is successful. When you apply, you can ask for an advance if you need help sooner.

Are there any consequences for this grant?

The grant will be taxable and must be declared in your 2020/2021 tax return. The Chancellor also said “it is now much harder to justify the inconsistent contributions between people of different employment if we all want to access equal support we must all be paying equally in future.”

I’m a director of a limited company, can I access this scheme?

If you pay yourself a salary and dividends through your own company, you are not covered by the scheme but may be covered for your salary by the Coronavirus Job Retention Scheme if you are operating through PAYE and are not a sole director. You also have other support open to you such as loans or grants. See our business flow chart for more details.

What other support is there?

Below are the flow charts we have generated to help guide you through the multiple sources of support that is available to you.

Support for Businesses Flow Chart

Support for Individuals Flow Chart

 

Final Note

Please be aware that some individuals are taking advantage of this situation to send out scam emails and calls impersonating:

– Banks
– Government assistance
– Local authorities

If you have any concerns on how Covid-19 may affect you or if you have any questions on what we have mentioned above please call us on 0191 586 1615 or click here to send us an email.