Self-Employment Income Support Scheme

As anticipated the Chancellor Rishi Sunak has announced this evening support for the self-employed.

With this scheme to be used by the self-employed or a member of a partnership if they have lost income due to coronavirus. 

 In summary the scheme details we have received so far are as follows:

• Self-employed people will be able to apply for a grant worth 80% of their average monthly profits over the last three years, up to £2,500 a month.
• At least half their income needs to have come from self-employment as registered on the 2018/19 tax return filed in January – anyone who missed the filing deadline has four weeks from now (till 23rd April 2020) to get it done and still qualify.
• The scheme is open to those whose trading profits are under £50,000 a year.
• Unlike the employee scheme, the self-employed can continue to work as they receive support.
• The money, backdated to March, will arrive directly into people’s bank accounts from HMRC, but not until June.
• The grants will be taxable and will need to be declared on tax returns for 2020/21
• It would appear that those who trade through a limited company taking a combination of small salary and dividends are not covered under this.

Further information about the scheme is attached with the guidance just published on the Gov.Uk website.

Whilst this is welcome for the self-employed it clearly doesn’t support those who operate their business through a limited company (often referred to as a personal service company). Therefore it remains to be seen if the Chancellor will go further still and support these individuals / companies, we will of course update you further if there is any movement on this.

A reminder of the other support available for businesses and individuals is as follows:

• a Coronavirus Job Retention Scheme
• deferring VAT and Income Tax payments
• a Statutory Sick Pay relief package for SMEs 
• a 12-month business rates holiday for all retail, hospitality and leisure businesses in England
• small business grant funding of £10,000 for all business in receipt of small business rate relief or rural rate relief
• grant funding of £25,000 for retail, hospitality and leisure businesses with property with a rateable value between £15,000 and £51,000
• the Coronavirus Business Interruption Loan Scheme offering loans of up to £5 million for SMEs through the British Business Bank
• a new lending facility from the Bank of England to help support liquidity among larger firms, helping them bridge coronavirus disruption to their cash flows through loans
• the HMRC Time To Pay Scheme

 As always, the team at LDF are available to answer any questions regarding the above and help you access the support available.