Self-Employment Income Support

Friday March 27, 2020

With around 5 million people working for themselves across the UK, something had to give. Existing measures like streamlined access to benefits and a relaxed deadline for Self Assessment were only going to do so much to help the nation’s self-employed workforce get through the COVID-19 crisis. As the pressure mounted, Chancellor Rishi Sunak made the following announcements on the 26th of March:

  • People making at least half of their income from self-employment will be able to apply for the new Self-Employment Income Support scheme.
  • To qualify, you’ll need to be making average trading profits of under £50,000. You also need to have filed a 2018/19 tax return, meaning you can’t be very new to the Self Assessment system.
  • If you already missed the 2018/19 Self Assessment deadline, you’ll have until the 26th of April to get your paperwork filed. If you hit that date, you can still qualify for the scheme.
  • Those who were only self-employed for a few months in the 2018/19 tax year will have the money they earned counted as their total profits in that year.
  • Company Directors paying themselves a salary or share dividends won’t qualify for the system.
  • As for what you’ll get, the government will cover you with a grant coming to 80% of your average monthly profits from the 2016/17, 2017/18 and 2018/19 tax years. As with employed people, there’s a hard cap of £2,500 per month, and the scheme’s initially running for 3 months. If you’re still finding your feet in self-employment and you’ve been making a loss, you won’t be covered by the scheme.
  • The money will come as a lump sum at the beginning of June, covering the period from March to May. It’s taxable, though, so you’ll have to declare it as income in your Self Assessment tax return.

You don’t need to do anything to claim Self-Employment Income Support just yet. Anyone eligible for the scheme will be contacted by HMRC with full details once everything’s up and running. You’ll have a form to fill in online, with the cash being paid directly into your bank account.

 

 

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