Tonight the Chancellor of the Exchequer, the Rt Hon Rishi Sunak, announced plans to help self-employed people through this health crisis, on the same terms as our Conservative Government has already agreed for employees on PAYE:
- New Self-Employed Income Support Scheme announced by the Chancellor.
- The Government will pay self-employed people who have been adversely affected by the Covid-19 outbreak a taxable grant worth 80% of their average monthly profits over the last 3 years - up to £2,500 per month.
- This will be open for at least 3 months across the UK, and will be extended if necessary.
- The self-employed will be able to claim these grants and continue to do business.
- The Government is covering the same amount of income as for furloughed employees, who also get a grant worth 80%.
- This is unlike almost any other country, making the scheme one of the most generous in the world.
- Steps have been taken to make the scheme deliverable and fair.
- It is open to those with trading profits up to £50,000 who make a majority of their income from self-employment.
- To minimise fraud, only those already in self-employment who have a tax return for 2019 can apply.
- Additional time (4 weeks) is being given to anybody who is a 'late-filer' - people who should have filed their tax return in January.
- 95% of people who are majority self-employed will benefit from this scheme.
- HMRC are working urgently to deliver the scheme and they expect people to be able to access it no later than the beginning of June.
- Payments made by June will be back-dated to 1st March.
- In understanding that some self-employed people are struggling right now - the Conservatives has made sure people can access the Business Interruption Loans. Income Tax payments due in July can be deferred to the end of January 2021. And the welfare system has changed so that self-employed people can access Universal Credit in full. Other measures for rent and mortgage protection have already been announced.
Those eligible will be contacted automatically by HMRC but, due to the complexity of setting up yet another bespoke scheme to deliver funding, the cash payments will not be available until June. There are a variety of things you can do to help with money between now and then:
- You can continue to trade and work for as long as possible.
- You can access Universal Credit and get up to £1,800pcm, depending on your circumstances.
- You will also not be asked to pay your self assessment taxes until the end of the year.
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