The Chancellor Rishi Sunak finally announced a further scheme to provide comparable support to the self-employed as the employed. The details had taken some time to be finalised as the process of supporting the self-employed had proved to be incredibly complicated.
We have provided a brief overview of the support now being provided to the self-employed.
Income Support Scheme
Self-employed workers will have 80% of their average earnings (up to £2,500 per month) paid for by the Government in a similar way to workers who are having their wages paid for by the Government.
The arrangements should be up and running by the beginning of the June so the self-employed will still have some time to go before they receive any cash and may need to access some short-term funding options – please do get in touch if you need some advice on this.
The eligibility for the scheme will be as follows:
- The scheme will be open to anyone with trading profits of up to £50,000 and will only be available to those who make the majority of their income from self-employment.
- You will need to have been in self-employment before the 5 April 2019 and have a tax return for 2019 to apply. If you are not eligible you can access full Universal Credit payments.
- The grant will be taxable since it is based on your last previous taxable income. Like the Job Retention Scheme this will be available for three months but will be extended if necessary.
- HMRC will contact all eligible self-employed people directly with an online form once the system is up and running. A lump sum covering three months will be paid directly into bank accounts from early June.
- If you have not yet submitted your 2018-2019 tax return you now have a four-week grace period to complete this.
In the meantime, we suggest you collate together all necessary information, so you are ready to complete the online form when it becomes available. At this point, we envisage this to be your taxable income from 2016-17, 2017-18 and 2018-19. Your bank details, your NI number and/or HMRC UTR number, DOB and address.
The second payment on account for the self-employed usually due on 31 July 2020 is now deferred until 31 January 2021. No penalties or interest will be charged for this period.
Anyone who has missed the January 2020 filing deadline will have four weeks to submit their tax return, so no-one misses out on support.
Statutory Sick Pay
At the moment if you are self-employed you will be able to claim full Universal Claim at a rate equivalent to Statutory Sick Pay if you are unable to work.
Time to Pay
All self-employed people in financial distress and with any outstanding tax liabilities may be able to seek a Time to Pay arrangement. There are reviewed on a case by case basis and tailored to the circumstances of the individual. So far HMRC have arranged over 17,000 Time to Pay schemes.
Help with rental costs
A further £1bn has been made available by the Government to help with rental costs.
If you need further support with any of the above, please get in touch. If you are concerned at waiting until June for your Income Support Scheme payment, then you could look at some funding options, you can find further information here.
If you need help or support on any of the above, please contact the friendly team at Clear Vision on 01794 330 025 or email us on firstname.lastname@example.org