Coronavirus: Update on support available for the Self-Employed

Rishi Sunak has provided further detail on his proposed measures to assist the self-employed weather a likely downturn in work during the coronavirus lockdown.

These measures are in addition to the earlier proposals on tax and VAT deferrals which we set out in our earlier article. They are designed to give broadly the same support to the self-employed as those already announced for the more conventionally employed.

Whilst much of the devil will be in the detail, the announced package promises the self-employed the following:

• A monthly taxable grant of 80% of monthly income, up to a maximum of £2,500.
• Open to those who:
  • make most of their income from self-employment.
  • have made (or submit within the next four weeks) a 2019 tax return; and
  • earned profits of under £50,000 a year.
• Monthly income will be calculated based on the average earnings over the last three financial years.
• HMRC will contact the eligible self-employed directly to invite them to fill out a form (yet to be released) to claim the grant, which will be paid directly into the individual’s bank account.
• The scheme does not affect the opportunity to take advantage of other measures previously announced measures.
• The self-employed can continue to work whilst claiming this benefit.
• The funds are unlikely to be available to the recipients until the end of June 2020, so those looking to take advantage will need to stay afloat until then.

Outstanding questions include “what will happen to the self-employed who get paid via PAYE and those who have less than three years self-employed income?”

Finally, the Chancellor also hinted that, as the self-employed are receiving the same support as the employed but not paying similar taxes, the group can expect increased taxation once the pandemic has eased.

If you  have any questions on this topic or any other, please contact our Coronavirus Employment Advice Helpline and we can help you to consider the options available to you and your business.