Support Package Announced for Self-employed

On 26 March 2020, the Chancellor announced a scheme to help support the UK’s self-employed affected by the coronavirus outbreak.

Key points:-

Direct cash grant of 80% of profits, up to £2,500 per month

The Cash grant of 80% is calculated as the average monthly trading profit over the last three years (15/16, 16/17 and 18/19)

The scheme is open to those with trading profits of less than £50,000 in 2018/19 or average of trading profit of less than £50,000 from 2016-17, 2017-18 and 2018-19

To qualify for the scheme, more than half of your income in these periods must come from self-employment

The scheme will cover the 3 months to end of May and will be paid in a single lump sum covering the 3 months and will start to be paid at the beginning of June

To minimise fraud, only those 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.

Please note that HMRC will use existing information that they hold to check potential eligibility and invite applications once the scheme is operational. Individuals should not contact HMRC now.

If you have not filed your 18/19 Tax Return, HMRC will allow one month to get this submitted to enable a direct grant to be made, and any such Tax Return must be submitted by 23 April 2020.

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, and qualify by not continuing to work, ie by not providing services or generating income to the business.

Further information and details of the scheme will be issued in due course.

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