Updated 27th March 2020, 10:40. For the latest medical advice, visit NHS.uk/Coronavirus.
Chancellor Rishi Sunak has set out a comprehensive package of support to help the self employed.
The government will pay self-employed people, who have been adversely affected by the coronavirus, a taxable grant worth 80% of their average monthly profits over the last 3 years, up to £2,500 per month. The scheme will be open for at least three months, and extended if necessary.
The self-employed can continue to claim these grants and continue to do business. The scheme is open to those with trading profits of up to £50,000 a year, who make a majority of their income from self-employment. To minimise fraud, only those in self-employment, who have a tax return for 2019 can apply.
HMRC are working urgently to get the scheme up and running, and the government expects people will be able to access it no later than the beginning of June. You don't need to do anything if you are eligible, HMRC will contact you with an online form, and pay the grant straight into your bank account.
Anybody who missed the filing deadline in January will have four weeks from today to submit their tax return.
The self-employed can also access the Coronavirus Business Interruption Loans, and Income tax payments that are due in July can be deferred until the end of January 2021.
Are you eligible?
To be eligible for the scheme you must meet all the criteria below:
- Be self-employed or a member of partnership;
- Have lost trading/partnership trading profits due to COVID-19;
- File a tax return for 2018-19 as self-employed or a member of a trading partnership. Those who have not yet filed for 2018-19 will have an additional 4 weeks from this announcement 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 to 2021
- Have trading profits of less than £50,000 and more than half of your total income come 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.
How do I access it?
Individuals should not contact HMRC now. HMRC will use existing information to check potential eligibility and invite applications once the scheme is operational. HMRC will then pay the grant directly to eligible claimants’ bank account. HMRC is urgently working to deliver the scheme; grants are expected to start to be paid out by beginning of June 2020. For eligible individuals who have not submitted their returns for 2018-19, they will have 4 weeks’ notice from the date of the announcement to file their returns and therefore become eligible for this scheme.
HMRC are publishing guidance on the scheme, available here. This guidance will continue to be updated.
When can I access it?
HMRC is urgently working to deliver the scheme; grants are expected to start to be paid by the beginning of June 2020. This time is necessary to ensure that the scheme is both deliverable and fair. In the interim the self-employed will still able eligible for other government support including more generous universal credit and business continuity loans.