COVID-19: Self Employed Income Support Scheme

Self Employed Income Support Scheme

COVID-19: BREAKING NEWS

Thursday, 26th March 2020

Chancellor Rishi Sunak has announced his generous and comprehensive package that will help some 95% of self-employed earners in an effort to protect their security and livelihoods.

A taxable grant of up to 80% of monthly earnings, will be based on the last 3 years of financial accounts capped at £2,500 per month.

Key Points

  • Open to those who had a 2018/2019 Self-Assessment Tax Return
  • Available to those with trading profits up to £50,000 a year
  • Initially available for three months but may be extended if needed
  • HMRC will notify those who are eligible
  • Payment will be made directly into the bank
  • Entire three-month grant to be paid in one go

Details of the grant

Self-employed workers are already facing financial difficulties as a result of coronavirus. This package of support from the government will help approximately 95% of those registered as self-employed.

By capping the earnings and applying this supportive grant to those with taxable profits up to £50,000, will see the majority of small business receiving an unprecedented level of support.

The taxable grant will be based on an average of monthly profits, taken from the last three financial years. Anyone who does not have three complete years will have their grant based on the accounts available.

HMRC will now spend time reviewing the 2018/2019 self-assessment system to establish who will be eligible and will send forms to those that can apply. The funds will be available from June if not sooner.

The grants will be paid as a lump sum, based on the three-month average earnings, and will be paid directly into a nominated bank account.

This support is capped at £2,500 per month and will initially last for three months. This may be extended if needed and will be reviewed over the coming months.

The grant is taxable and must be reported on the 2020/2021 self-assessment tax return.

Additional Measures

Rishi Sunak also announced that anyone who has not yet filed their 2018/2019 self-assessment tax return will be given an additional 4 weeks to ensure that those who qualify do not miss out on the support available.

What happens in the meantime?

As previously announced, additional support is available in the form of the Business Interruption Loan and following enhancements to the welfare system, Universal Credit is now more widely available to those heavily dependant on the sole self-employed earnings of a household.

It is worth noting that the Business Interruption Loan will be interest free for the first 12 months and is available directly from the bank. It is hoped that this will help bridge the gap until the grants are made available to both employers and the self-employed.

Who Misses Out?

Unfortunately, those in the 5% bracket are estimated to have average earnings of £200,000 a year, and it has been assumed would be in a position better able to weather the storm by means of surplus funds or other measures already announced.

If you have only recently become self-employed and were not required to complete a 2018/2019 tax return, then you miss out too. The reason being that it would be unfair to base the average earnings on assumptions without the history of trade to support awarding the grant. Again, the other support measures as announced are there to help you.

Other support comes in the shape of the Business Interruption Loan, Small Business Rates Relief Grants, the Job Retention Scheme and Universal Credit.

What Happens Now?

If your tax returns are up to date, then sit back and wait for HMRC to contact you.

Still not completed your 2018/2019 tax return, then get in touch with us now. Any delays may result in you not being eligible for the grant and the support needed.

By using Onyx Accountants and Business Advisors to complete your accounts and calculate the average earnings you eliminate the worry which allows you to concentrate on staying safe and looking after your family.

GET IN TOUCH WITH ONYX

Unsure of how much grant you may be entitled to or need help completing your 2018/2019 accounts?

Contact us now or e-mail us at  enquiries@onyxaccountants.co.uk for a FREE no obligation consultation.

Got any questions or queries? Our friendly team of tax specialists are happy to help. Just drop us a line! Call us on 0121 753 5522 or 01902 759 800.

Keep up to date with the latest announcements by visiting our dedicated page https://onyx.accountants/covid/