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COVID-19 Self-Employment Income Support Scheme in the UK

Self-Employed and Freelance workers in the UK make up around 5 million of the UK workforce, which in itself totals around the 28 million people.

In recent weeks the self-employed in Britain have been patiently awaiting announcements, worried about how they will survive in these unprecedented times and seeking information on any self employment support allowance to be released for them.

On 26th March 2020 The Chancellor announced the release of new packages via the HMRC self-employment press release with measures to assist the self-employed and freelancers in the UK who are non-PAYE employees. 

It is suggested that these packages will stand to assist around 95% of the 5 million self-employed and freelance workers in the UK.

So what is the Package?

The package is called the Self-Employed Income Support Scheme

People who are self-employed are eligible to receive up to £2,500 per month in grants for at least 3 months

Eligible candidates can receive a cash Grant worth 80% of the average monthly trading profit (not revenue) over the past 3 years. These amounts will be taxable.

If individuals do not have three years of accounts on record at the HMRC then two and even one years accounts will be accepted in these cases

Those individuals who have not yet submitted their accounts in January 2020 we will have an extension of a further months until the 30th of April 2020. This extension will be late penalty free allowing them to make the submission within this time.

Any individual who has not yet filed accounts or traded for a minimum of one year will unfortunately not be eligible for this scheme

Who qualifies for this self-employed scheme?

The scheme above will be open to individuals with a trading profit of less than £50,000 in 2018-19 or or individuals with an average trading profit of less than £50,000 from 2016-17, 2017-18 and 2018-19.

To qualify more than half of an individual's income in these periods must come directly from Self-Employment.

Only those individuals who are already registered and trading as Self-Employed and who meet the above conditions will be eligible to apply, this is in place to minimise fraud or false applications.

This scheme does also apply to individuals who are Members of Partnerships

The income support scheme designed by HMRC from scratch will cover three months to May 2020.

Grants will be paid in a single lump sum in instalments covering all three months and this will start to be paid from the beginning of June 2020.

It is important to note that those who pay themselves a salary and dividends through their own company are not covered by the scheme but will be covered for their salary by the Corona Virus Job Retention Scheme, if they are operating PAYE schemes. However, this is not yet operational.

GOV‌.UK has further details about who is eligible for the scheme and how it will work.

How do you access the scheme?

All self-employed individuals who are eligible for the new scheme will be able to apply directly to HMRC for the taxable Grant shortly. This will be done using a simple online form and the cash granted will be paid directly into the eligible candidates bank account.

If you are submitting late returns for your self assessment with HMRC, you need to do so now. If you already submitted your return then you do not need to take any action.

Due to the scheme being administered by HMRC they will be the ones to contact each individual and direct them to the relevant online form that will need to be completed and submitted electronically. So it is important to note that individuals DO NOT need to contact HMRC at this time.

HMRC will be using existing information on their records to check potential eligibility and to invite applications once the scheme is operational and ready to go.

What if I have no money and June is too long to wait for the payment?

It is understood that for many people waiting until June for a payment will be too long a period to go without money. Understandably, not everyone will have enough to tide them over until then.

In such cases the Chancellor has suggested that such Self-Employed individuals will still be able to access alternative available government support, including revised and more generous Universal Credit and something called the Coronavirus Business Interruption Loan Scheme (CBILS).

It is important to note that fees and interest on these loans will be paid by the government for the first 12 months making them completely interest free for customers.

Applying for Universal Credit online has been simplified and can be done by clicking here

Although standard Universal Credit payments would usually begin 5 weeks after application approval, individuals are now eligible to obtain an immediate cash advance, as soon as the initial application has been accepted.

What else has been released and how do you access it?

Deferral of Self Assessment Income Tax payments due in July 2020 and VAT payments due from 20 March 2020 until 3‌0‌‌ June 2020

Increased amounts of Universal Credit

Directors of their own company paid through PAYE, may be able to get support using the Job Retention Scheme.

 Need more Information and Support?

HMRC Contact Number: 0300 200 3300

Further details and additional information about the self-employed scheme are to be shared by HMRC in due course. Please continue to check our blog and newsletters for daily updates buy book marking us on your browser for quick and easy access:

COVID-19 Self-Employment Income Support Scheme in the UK COVID-19 Self-Employment Income Support Scheme in the UK Reviewed by Crystal Emmanuel on 15:21 Rating: 5

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