Coronavirus: Support for self-employed workers, sole traders and freelancers
As you may be aware, the Chancellor has bowed to significant pressure from MPs, business organisations, and individuals, and has unveiled a self-employed income support scheme.
Below is a summary of the key points of how the scheme will operate:
- The Government will pay self-employed people who have been adversely affected by COVID-19 a taxable grant worth 80% of their average monthly profits over the last 3 years.
- Those with shorter trading histories will have their monthly payment calculated from that history; i.e. those who have submitted two tax returns will have an average taken for those two years.
- Those who have started trading in the current 2019/2020 tax year are not eligible for the scheme.
- The grant will be capped at £2,500 per month.
- The scheme will be open for at least three months.
- Individuals will be able to claim the grant whilst trading.
- The scheme is open to anyone with trading profits of up to £50,000.
- The scheme is only available to those who make the majority of their income from self-employment.
How do I apply?
- Only those who are already in self-employment, who have a tax return for the tax year 2018/2019, will be able to apply.
- HMRC are currently setting up the scheme and expect people to be able to access it from the beginning of June.
- Those eligible will be contacted by HMRC directly and asked to fill in a form online.
- Anyone who missed the January 2020 filing deadline for their tax return has an additional 4 weeks from today (26 March) to submit it in order to qualify for the scheme.
Ben Lake MP said:
“I welcome the support for those who are eligible and recognise that this will benefit a large number of constituents in Ceredigion.
“I remain concerned however that it will be at least two months until any money reaches the bank accounts of many already struggling self-employed people.
“Secondly, those who have recently become self-employed will be massively disadvantaged. Those with only one year’s trading history, for instance, will qualify for a grant which reflects their start-up trading profits rather than their current income. More alarmingly, those who have begun trading within the current tax year are disqualified from this support. Instead, they will be expected to depend upon the paltry £94 per week offered by Universal Credit.
“An emergency Universal Basic Income, as Plaid Cymru called for, would have overcome many of the technical issues that has delayed this scheme and that will continue to mean a delay in people receiving support.”