Coronavirus Support for Self-Employed
Chancellor Rishi Sunak announced that self-employed people will continue to receive government support under new measures.
The extension to the Coronavirus Self Employed Income Support Scheme (SEISS) is designed to support people in a similar way that the Coronavirus Job Retention Scheme (CJRS) helps employed people. However, there are some groups to the self-employed scheme that will miss out.
What help is now available?
The original package announced in the spring, was that if the self-employed had suffered a loss in income, a taxable grant was paid worth 80% of their profits with a cap of £2,500 per month.
SEISS was available to those businesses that were trading in the financial year of 2018-2019 and whose business had been impacted by the coronavirus.
The initial package was a one-off lump-sun payment which was supposed to cover three months. Over the summer, a “second and final” payment was announced covering 70% of profits, up to a cap of £2,190 per month for another three months, totalling £6,570.
Around 2.6 million people were given at least one of these payments.
What new measures are in place for the winter?
The chancellor’s winter economy plan has included fresh support grants for the self-employed, although these are less generous than the previous payments.
At the start of November, a first (taxable) grant will cover 20% of average monthly trading profits, paid out in a single instalment covering three months’ worth of profits, with a limit of £1,875 in total.
The second grant will then cover a three-month period from February 2021 until the end of April, but at the moment, no amount has been stated.
- More than half of the claimant’s income need to come from self-employment.
- Trading profit of less than £50k in 2018-2019 / or an average trading profit of less than £50k from 2016-2017, 2017-2018 and 2018-2019
- Newley self-employed will not receive any help under this scheme.
How do I claim the help?
HMRC will use existing information to identify those eligible and will send an application
The application requires them to confirm that they meet the eligibility requirements
For the self-employed who pay themselves a salary via their own company are not covered by the scheme, however they may be entitled to have some of their salary covered by the CJRS if they operate through PAYE.
There are five million self-employed people in the UK, and about 3.8 million of them may be covered by this scheme.
So far, 2.6 million self-employed people have signed up. Roughly a fifth of the self-employed are in the construction industry.
A note on Self-Assessments
The deadline for self-assessments is 31st January 2021, however payment plans can be set up to give businesses more time to pay their tax bill up until January 2022. For other key accounting deadlines view our accounting calendar here.
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