Self Employed Income Support Scheme
Friday, 27 March 2020
The Chancellor has finally unveiled his support package for the country’s 5 million self-employed.
It will support those whose income comes mainly from self-employed activities and where their profits are up to £50,000. This will account for 95% of the self-employed population.
As with other recent announcements, the finer details will follow and initially there will be questions that remain unanswered.
Here’s what we know
- The scheme will be backdated to March and payments will be made no later than June
- The payments will be a taxable grant and will need to be included in the 2020/2021 tax returns
- The grant paid will equate to 80% of the average monthly profit over the last 3 years
- The maximum monthly payment will be £2,500 (to be aligned with the Job Retention Scheme)
- Only those with profits up to £50,000 will be eligible
- HMRC will contact those who qualify and a simple online form will need to be completed
- The scheme will initially run for 3 months but may be extended
- You can claim the grant and still do business
- You need to have already been self-employed and required to file a 2019 tax return to be eligible
Responding to a challenge over the timing of the payments, the Chancellor reiterated that businesses can still apply for a Business Interruption Loan and defer their July Self-Assessment Payment on Account to January 2021.
The Chancellor’s overriding message was the presentation of a solution that is “fair and targeted” and, on balance, it would be hard to say this is not the case. However, whilst the Job Retention Scheme covers all employees, it does seem that the Self Employed Income Support Scheme will only cover 95% of those self-employed. He suggested that the remaining 5% had average profits of £200,000. There is a big difference between £50,000 and £200,000! I suspect if you are reading this and had an average profit of £51,000 for the last 3 years, and your business has fallen off a cliff, it is not looking particularly “fair” at this point.
There are always things you can do and positive actions you can take, whether you meet the qualifying criteria or not. We have a team of experts who can help you navigate through the Self Employed Income Support Scheme and general business planning and support.
To read further information on the Self Employment Support Scheme click here to read our detailed guidance note.
Please speak to your usual MHA Larking Gowen contact or email email@example.com