Last night the Chancellor announced further measures to help businesses during the Coronavirus outbreak: this time in the form of help for the self-employed.
Under the new Self-Employment Income Support Scheme, individuals could be eligible to receive a cash grant of up to 80% of their profits, of up to £2,500 per month.
The grant will be based on average trading profits over the last 3 years and, unlike the Job Retention Scheme, self-employed individuals CAN keep working.
How to I apply?
Do nothing now. HMRC will get in touch with you in June with details of how to apply.
How do know if I am eligible?
To qualify, you must have been self-employed for more than one year, and must have at least one set of file self-assessment accounts. If you are one of the people who is late to submit last year’s tax accounts (2018-19), the government is giving you 4 weeks to do this now.
To qualify for the scheme, your profits over the last 3 years must be less than £50,000 pa.
How will I receive the grant?
This will be paid in a lump sum in June and will cover loss of earnings for March, April and May.
What if I worked until the middle of March?
This will be considered at the time of application and you should receive help for the 2.5 months you didn’t work as much.
I think I may be able to continue to work a small amount during March, April and May. How will this affect my grant?
The government is currently saying you can continue to work throughout this period, but how this will affect your application for a grant, we don’t yet know. We are expecting further clarification from the government next week and will update this article when we hear.
What do I do if I earn both employed and self-employed earnings?
As long as your self-employed earnings account for over 50% of your income, you are eligible for this scheme.
My business is only 2 years old so I don’t have 3 years of accounts.
That’s fine. You only need one set of self-assessment accounts to have been submitted. The grant you receive will be averaged over the 2 years of tax returns.
What if I’ve been self-employed for less than a year?
Sorry, you aren’t eligible for this scheme. See below for suggestions to help you.
I earn by PAYE. Can I apply for this scheme?
Sorry no, but you might be able to be furloughed under the Coronavirus Job Retention Scheme. Talk to your employer who can help you with this.
Can I apply for the grant if I have a limited company?
Individuals who think of themselves as self-employed but actually operate through a limited company are not eligible for this scheme.
What about individuals with limited companies who receive dividends and PAYE?
Under this scheme, the government isn’t counting dividend income so we’d recommend you furlough yourself on your PAYE income.
June is 3 months away. Where can I get help in the meantime?
Generally, there are 3 options for you:
- Look at a Coronavirus Business Interruption Loan (you can see our previous article on this here). These can pay up quickly if you are in financial need.
- You could use the money you may have set aside for your July self-assessment return.
- You can apply for Universal Credit if you are out of work or on a low income. It can also be paid within days.
- Talk to your landlord or mortgage provider and defer your payments.
- Speak to your bank as it may able to help.
As always please get in touch with the XPOS team via email@example.com with any questions or help. crossovertec.co.uk Follow us on social.