Thursday 26 March 2020
The Chancellor, Rishi Sunak, has just announced details of the government backed pay scheme for the self-employed during the covid-19 coronavirus crisis.
- It’s a taxable grant of 80% of average monthly income, capped at £2,500 per month
- Income will be the average income over the last three years
- You can claim these grants and continue to do business. (So in that respect it differs from The Coronavirus Job Retention Scheme for employees, where recipients can’t work)
- It’s only open to anyone with trading profits of up to £50,000 (which covers 95% of self-employed people). Self-employed people who earn more will not qualify.
- It’s only open to those who make the majority of their income from self-employment. So if you are employed but have a ‘side job’ which is self-employed, you will not be eligible
- It’s only for those who have submitted a tax return for 2019 (to minimise fraud). However, those who did not submit their tax return by the due date of 31 January 2020, and have not yet submitted one, can still submit a tax return for 2019 for a further four weeks from today 26 March 2020.
- For a payment mechanism, there are no steps to take. HMRC will contact eligible self-employed people directly and pay the grant straight into their bank account after asking them to fill in an online form.
- This scheme will be open to people across UK for at least 3 months. However, the scheme is unlikely to be up and running before the end of June 2020 so it will not help with immediate cash flow issues.