Added on: 26th March, 2020 by O1
Chancellor Rishi Sunak has unveiled a support package for self-employed workers saying "you have not been forgotten."
Self-employed people adversely affected by the virus people will be able to apply for a grant worth 80% of their average monthly profits over the last three years, up to £2,500 a month.
The scheme will be open for thee months and will be extended if necessary.
To qualify, at least half of your income needs to have come from self-employment - as registered on the 2018-19 tax return filed in January - if you missed the filing deadline you have four weeks from now to get it done and still qualify.
The scheme is open to you if you earn under £50,000 a year (up to 3.8 million of the 5 million people registered as self-employed).
It's anticipated that the scheme will be open at the beginning of June, latest, and unlike the employee scheme, the self-employed can continue to work as they receive support. The money will be backdated to March and will arrive directly into people's banks accounts from HMRC - the government will contact those eligible.
The grants will be taxable, and will need to be declared on tax returns by January 2022. Company owners who pay themselves a dividend are not covered.
The chancellor said that those who only became self-employed very recently would have to look to the benefits system for support.
He also reiterated that devising a fair and workable scheme had been difficult because the self-employed were a "diverse population" some of whom earned a great deal.
To be eligible for the scheme you must meet all the criteria below:
• Be self-employed or a member of partnership;
• Have lost trading/partnership trading profits due to COVID-19;
• File a tax return for 2018-19 as self-employed or a member of a trading partnership.
• Those who have not yet filed for 2018-19 will have an additional 4 weeks from this announcement to do so;
• Have traded in 2019-20; be currently trading at the point of application (or would be except for COVID 19) and intend to continue to trade in the tax year 2020 to 2021
• Have trading profits of less than £50,000 and more than half of your total income come from self-employment. This can be with reference to at least one of the following conditions:
• Your trading profits and total income in 2018/19
• Your average trading profits and total income across up to the three years between 2016-17, 2017-18, and 2018-19.
Individuals should not contact HMRC now. HMRC will use existing information to check potential eligibility and invite applications once the scheme is operational. HMRC will then pay the grant directly to eligible claimants’ bank account.
CLICK HERE to find out about the range of business support measures have been made available to UK businesses and employees.