Financial Support for the Self Employed

Financial Support for the Self Employed 

At 5 pm today the Chancellor of the Exchequer, Rishi Sunak, announced measures to support self-employed people during the Coronavirus outbreak. The scheme is similar to the Coronavirus Job Retention Scheme in that self-employed individuals will receive a taxable grant of 80% of their average monthly self-employed income based on the last three year’s tax return information.  

The maximum grant is £2,500 per month. There is an income cap so that the scheme is only available for those with trading profit up to £50,000 per annum. Other caveats include the majority of an individual’s income must arise from self-employment and individuals must have filed a self-assessment return for the 2018/19 tax year. The Chancellor has offered a four-week window for individuals who have not yet filed that return which was due on 31 January 2020 to enable them to file during the four-week window and therefore be eligible for the grant. 

It is expected that funds will be available from the beginning of June and that a simple on-line form will be the method of claiming the grant. HMRC will identify eligible taxpayers and contact them directly with guidance on how to apply. Funds will go direct to the individual’s bank account. 

We believe that the definition of self employed will be the usual HMRC definition which relates to sole traders and partners in a partnership with a trading income. The chancellor specifically confirmed that those who receive a salary and/or dividend from their own company are not covered by this scheme.