10:14 AM, 27th March 2020, About 5 years ago 9
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In the latest step to protect individuals and businesses, Rishi Sunak has set out plans that will see the self-employed receive up to £2,500 per month in grants for at least 3 months.
Millions of people across the UK could benefit from the new Self-Employed Income Support Scheme, with those eligible receiving a cash grant worth 80% of their average monthly trading profit over the last three years. This covers 95% of people who receive the majority of their income from self-employment.
This brings parity with the Coronavirus Job Retention Scheme, announced by the Chancellor last week, where the Government committed to pay up to £2,500 each month in wages of employed workers who are furloughed during the outbreak.
Cleaners, plumbers, electricians, musicians, hairdressers and many other self-employed people who are eligible for the new scheme will be able to apply directly to HMRC for the taxable grant, using a simple online form, with the cash being paid directly into people’s bank account.
Chancellor Rishi Sunak said: “Self-employed people are a crucial part of the UK’s workforce who’ve understandably been looking for reassurance and support during this national emergency.
“The package for the self-employed I’ve outlined today is one of the most generous in the world that has been announced so far. It targets support to those who need help most, offering the self-employed the same level of support as those in work.
“Together with support packages for businesses and for workers, I am confident we now have the measures in place to ensure we can get through this emergency together.”
The scheme will be open to those with a trading profit of less than £50,000 in 2018-19 or an average trading profit of less than £50,000 from 2016-17, 2017-18 and 2018-19.
To qualify, more than half of their income in these periods must come from self-employment.
To minimise fraud, only those who are already in self-employment and meet the above conditions will be eligible to apply. HMRC will identify eligible taxpayers and contact them directly with guidance on how to apply.
The income support scheme, which is being designed by HMRC from scratch, will cover the three months to May. Grants will be paid in a single lump sum instalment covering all 3 months, and will start to be paid at the beginning of June.
Individuals should not contact HMRC now. HMRC will use existing information to check potential eligibility and invite applications once the scheme is operational.
Those who pay themselves a salary and dividends through their own company are not covered by the scheme but will be covered for their salary by the Coronavirus Job Retention Scheme if they are operating PAYE schemes.
The scheme has been designed after extensive engagement with stakeholders including the TUC, the Federation of Small Businesses and IPSE – The Association of Independent Professionals and the Self-Employed.
Self-employed individuals are already benefitting from a series of measures announced by the Chancellor to boost household incomes and will be able to access these while the new scheme is being rolled out.
These include a strengthening of the welfare safety-net with a £7 billion boost to Universal Credit, income tax and VAT deferrals, £1 billion more support for renters and access to three-month mortgage holidays.
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Tim Rogers
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Sign Up11:17 AM, 27th March 2020, About 5 years ago
As far as I can see, anyone operating a small BTL business, has no mortgage debt, has stressed tenants and is taking income as dividend or repayment of capitalisation debt... have been neatly sidelined.
Maybe I've missed something???
Porky
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Sign Up12:33 PM, 27th March 2020, About 5 years ago
Yes sidelined because the thought is tenants will be getting help to pay their rent so landlords should not be out of pocket.. just delayed income. Time will tell if this is true.
Rob Thomas
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Sign Up14:56 PM, 27th March 2020, About 5 years ago
UK government measures have been targeted at those that need them most - laid off employees and the self-employed earning up to £50,000 a year. This is very sensible and indeed generous - some self-employed people will be earning through the crisis yet are still eligible for a grant of 80% of previous average monthly earnings.
As Porky says if our employed and self-employed tenants are being supported they have no excuse to avoid paying rent, although some may have to delay until this support arrives.
Laura Delow
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Sign Up17:17 PM, 27th March 2020, About 5 years ago
Problem is if earning over £50,000 in previous tax year or the last 3 years average exceeds this, there's no support for these S/E landlords yet their incomes are/will be down which is not reflected in previous y/e accounts.
Also unless I've misunderstood the announcement, if a LL also has self employed earned income which doesn't represent at least 50% of the overall income incl rental income, they won't get support for loss of their earned income either.
Directors taking Dividends will also get no UC support if have savings of £16K or greater.
Rob Thomas
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Sign Up17:34 PM, 27th March 2020, About 5 years ago
Reply to the comment left by Laura Delow at 27/03/2020 - 17:17
Support has been targeted at those who need it most, which is right because the government doesn't have limitless amounts of money (despite how it might appear to some). Someone making £50,000 in self-employment should be in a position to put something aside for a rainy day. I have self-employment income but it's less than 50% of my total income so I don't qualify. Again, I think this is fair - I'd rather stand on my own two feet rather than relying on government handouts. An old fashioned view I know but there you go.
By the way, someone is going to have to pay for all this in the long run.
AP
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Sign Up9:06 AM, 28th March 2020, About 5 years ago
I earn more from rental income than self employment (which has entirely dried up now). From my understanding, because of this I am not eligible for any support for all my self employed income disappearing. If tenants stop paying, although I can defer the mortgage payments, I won’t be making any income at all!
Dennis Leverett
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Sign Up9:55 AM, 28th March 2020, About 5 years ago
Am I correct in saying that SE won't find out if they can claim until they hear from HMRC end of June and then a wait while they claim, what happens if they don't hear after waiting. What are they supposed to do till then. Both my son-in-laws are SE and have vans and overheads to pay for apart from mortgages. Fortunately they are both sensible and have a buffer put aside for such times but that won't last for to long and what about those that haven't. I'm SE with income other than rent and fortunately can ride the storm but it's still income that's gone forever, be interesting to see if I hear.
Dylan Morris
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Sign Up13:16 PM, 31st March 2020, About 5 years ago
Self employed are eligible to apply for a “grant” which is really a loan and will need to be repaid. Employed are to be gifted 80% of their salary. Doesn’t sound very fair to me. Yet the Chancellor wants to increase NI for self employed as he says they are treated the same. He obviously doesn’t understand the difference between a gift and a loan, or making out that he doesn’t. Typical politician.
Kathy Evans
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Sign Up15:41 PM, 31st March 2020, About 5 years ago
Reply to the comment left by Tim Rogers at 27/03/2020 - 11:17
It's only 80% of profit, not income and many expenses still have to be paid, so not viable for many self-employed people. It also does not apply to directors of small LTDs. Basically, it sucks and many of the self employed will be on UC - which at least will pay their rent.