Self-Employed Income Support Scheme

The long-awaited statement from the Chancellor, Rishi Sunak regarding COVID-19 support for the self-employed has been announced. The Chancellor said that the scheme will benefit some 95% of people whose main income source is derived from self-employment.

A list of the scheme features as announced, and published, are as follows:

  • Those that qualify will receive a cash grant from HMRC based on 80% of profits, up to £2,500 per month,
  • The initial grant will be for the three months, from 1 March through to the end of May 2020, but could be extended for a longer period.

To be eligible, the following conditions will be taken into account:

  • Applicants must be self-employed or a member of a trading partnership,
  • Have lost trading profits due to COVID-19,
  • Have filed a tax return for 2018-19. Late filers will have four weeks from 26 March 2020 to do so,
  • Have traded in 2019-20; be currently trading at the point of application (or would be except for COVID-19) and intend to continue to trade in the tax year 2020-21,
  • Have trading profits of less than £50,000 and more than half of total income from self-employment. This can be with reference to at least one of the following conditions:
    • Your trading profits and total income in 2018-19,
    • Your average trading profits and total income across up to the three years between 2016-17, 2017-18, and 2018-19.

There is no need to apply to HMRC as they will contact you if you are eligible. HMRC will use existing data to make this judgement. The initial three-month grant will be paid directly to a nominated bank account in a single lump sum. The grants are expected to be paid out at the beginning of June. The reason for this delay is likely down to three main factors: the 4 weeks additional filing time for late filers, the requirement to set up a complex new system at the same time as the Coronavirus Job Retention Scheme and to reduce the risk of fraud.

It is assumed that those self-employed who have experienced a significant drop in income due to COVID-19 disruption will need to apply for Universal Credits or Business Continuity Loans to tide them over until June. This will be a challenging time for those affected as the demand for help will place significant challenges on the institutions charged with providing this support.

CORONAVIRUS JOB RETENTION SCHEME (CJRS) – update for director shareholders

There has been uncertainty as to the position of director/shareholders claiming under the CJRS as their income is usually taken from their company as a combination of a low salary and dividends. In the news story published following the Chancellor’s statement on 26 March (regarding the Self-employed scheme) is a telling paragraph. It says:

Those who pay themselves a salary and dividends through their own company are not covered by the scheme (the Self-employed Scheme) but will be covered for their salary by the Coronavirus Job Retention Scheme if they are operating PAYE schemes.

This infers that directors will only be eligible for the CJRS based on their salary alone, and only if there is a proven PAYE record.

Further details of the CJRS are due to be published imminently and will be added to our newsfeed as soon as they are available.

Share:

Share on facebook
Share on twitter
Share on pinterest
Share on linkedin
Accounting in Sheffield and Doncaster Certificates

Recently Added News

Travel corridors

It is almost impossible to keep up with changes to overseas territories that require us to self-isolate when returning to the UK from a holiday

Read More »

HMRC put their case

HMRC has been at the forefront of the government’s response to the coronavirus (COVID-19) and the extraordinary challenges being faced by millions of individuals and

Read More »

Related News

E-commerce eases COVID disruption

Online sales soared by 800% for London-based start-up, OLLY’S, after losing 40% of its monthly revenue overnight due to the Coronavirus pandemic. The following was

Quick Links

Online References...
Client Testimonials
Meet the Team

Sheffield Office:
2 President Buildings,
Savile Street East,
Sheffield ,
South Yorkshire,
S4 7UQ

Telephone:
0114 272 0306
Fax:
0114 272 6158
email:
sheffield@roystonparkin.co.uk

Opening Hours:

Mon-Wed: 8.30am – 5pm
Thursday: 8.30am – 7pm
Friday: 8.30am – 2pm

Doncaster Office:
3 Railway Court,
Ten Pound Walk,
Doncaster,
South Yorkshire,
DN4 5FB

Telephone:
01302 320444 / 304440
Fax:
01302 342604
email:
doncaster@roystonparkin.co.uk

Opening Hours:

Mon-Thurs: 9am – 5pm
Friday: 9am – 4.30pm