The Government has been under increasing pressure since announcing its unprecedented Coronavirus Job Retention Scheme for employees (see our update here), to make some provision for financial relief for the self-employed. It has now outlined the Coronavirus Self-employment Income Support Scheme.
This will be available to self-employed individuals who have suffered a loss of income as a result of measures to prevent the spread of the Coronavirus.
Those who are eligible will receive a taxable grant worth 80% of their average taxable monthly profits up to a cap of £2,500 per month.
The scheme will be available for three months and grants will be paid in one lump-sum payment. It is intended that grants will start to be paid from June, so is unlikely to provide immediate financial relief to self-employed individuals.
The scheme is open to those who were trading in the last financial year (i.e. those who have submitted a tax return for 2019).
Income will be calculated based on average income over the last three years. The scheme will be open to those with a trading profit of less than £50,000 in 2018-2019, or an average trading profit of less than £50,000 from 2016-2017 and 2017-2018. To be eligible for the scheme more than half of the self-employed individual’s income needs to come from self-employment.
Self-employed individuals can claim this grant and continue to do business; they are not in the same position as furloughed workers who must not undertake any work for their employer during their furloughed period.
HMRC will use existing information to identify self-employed individuals who are eligible and contact them directly.
These measures are likely to provide some, albeit delayed relief for self-employed workers in the short term.
Should you have any queries regarding these measures or any of other matter arising as a result of Coronavirus, such as Statutory Sick Pay provisions, Lay-off and furloughing of workers or the Coronavirus Job Retention Scheme don’t hesitate to get in touch with our Employment Team.