Chancellor announces measures to protect the self-employed during the coronavirus outbreak
26 March 2020
Chancellor, Rishi Sunak, addressed those individuals who are self-employed, reassuring them “you have not been forgotten”.
The government will pay self-employed people affected by the coronavirus outbreak a direct cash grant of up to £2,500 per month, of 80% of their average monthly profits over the previous three years, in alignment with how the government will reimburse employers in relation to the salaries of furloughed workers.
The grant will be available to millions of self-employed individuals, for a minimum period of three months. The government have given it the title, the ‘Self-Employed Income Support Scheme’, and it will cover 95% of people who receive most of their income from self-employment. Anyone wishing to apply directly to HMRC for the taxable grant will be required to complete a simple online form, and the cash will be paid directly into their bank account.
The scheme is open to anyone with a trading profit of less than £50,000 in 2018-19 or an average trading profit of below £50,000 from 2016-17, 2017-18 and 2018-19. More than half of the income of these individuals must have been obtained through self-employment, and to minimise fraud, only those who are already in self-employment will be eligible. HMRC will identify any eligible taxpayers and provide guidance on how to apply by contacting them directly. The advice given is not to contact HMRC at this stage, as following eligibility checks, application invites will be sent once the scheme is operational.
HMRC is designing the income support scheme and it will cover the three months to May. The grants will be paid in a single lump-sum instalment covering all three months and will be paid at the start of June.
Anyone who pays themselves a salary and dividends through their own company are not covered by the scheme but will be covered by the Coronavirus Job Retention Scheme if they utilise PAYE schemes.
The Chancellor said:
“Self-employed people are a crucial part of the UK’s workforce who’s understandably been looking for reassurance and support during this national emergency.
The package for the self-employed I’ve outlined today is one of the most generous in the world that has been announced so far. It targets support to those who need help most, offering the self-employed the same level of support as those in work.
Together with support packages for businesses and for workers, I am confident we now have the measures in place to ensure we can get through this emergency together.”
Information provided in this news article may be subject to change. Please make note of the date of publication to ensure that you are viewing up to date information. Download the CIPP's Payroll: Need to know - your guide to payroll legislation and reporting for the most up to date data.