Coronavirus Self-employed Income Support Scheme announced
In response to growing pressure, the government has announced a financial support program for the self-employed. Get the latest news here, and find out how to apply.
When the government announced the Coronavirus Job Retention Scheme, one key group was missing, the self-employed. Finally though, support has arrived for the UK's five million self-employed workers (equal to 15% of the UK population).
Finally, the government has responded, announcing the Self-employed Income Support Scheme to support the UK's self-employed workers. The scheme mirrors the Coronavirus Job Retention Scheme, paying self-employed workers 80% of their monthly earnings up to the same cap of £2,500 a month.
Get the lowdown on the scheme here, including how it works, who is eligible, and how to apply:
How the coronavirus Self-employed Income Support Scheme works
Essentially the support announced is similar to the Coronavirus Job Retention Scheme, here are the key points:
- Self-employed people will be paid a taxable grant that is equal to 80% of their average monthly earnings
- This calculation will be based on the last three years of submitted accounts (less for those who do not have three years of submitted accounts)
- The scheme is expected to be up and running from the beginning of June 2020
- The money will be paid in one lump sum direct into peoples' bank accounts
- People will be able to work while claiming money via the scheme
Who is eligible for the coronavirus Self-employed Income Support Scheme
There are some key limits on who will be able to claim:
- Self-employed people must have an annual trading profit under £50,000
- Self-employed people must have filed a tax return for 2019 (for anyone who hasn't, the window for filing a tax return is now open for four weeks from 26 March 2020)
- Claimants must derive the majority of their income from self-employment
How to apply for the coronavirus Self-employed Income Support Scheme
As stated above, the scheme is expected to be up and running from the beginning of June.
Applications will be via an online system that is currently under development, and HMRC will contact all those who are eligible based on their tax records once the scheme is open for applications.
Other self-employed support
The inevitable question from this was of course how self-employed people are supposed to support themselves until June.
The main answer from the government was that they should claim universal credit. While the usual timescale for this is five weeks, the chancellor assured self-employed workers that they could receive an advance payment within days of their application.
To illustrate the amount available, he argued that a self-employed person with a non-working partner and two children, living in the social rented sector, can receive welfare support of around £1,800 per month.
The government also previously announced that self-assessment income tax payments have been deferred for six months, so payments that would have been due on 31 July 2020 are now due in January 2021.
This deferral will be granted automatically.