Coronavirus – Self Employed Income Support Scheme
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.
The Chancellor has said that the scheme will benefit some 95% of people whose main income source is derived from self-employment.
Veracity are here and available to help you and your businesses through this extremely challenging period.