The Covid-19 support for the self-employed has been announced and is expected to benefit some 95% of people for whom self-employment is their main source of income. Here are the detail so of the scheme:
- Those that qualify will receive a cash grant from HMRC based on 80% of profits, up to £2,500 per month,
- The initial grant will be for the three months, from 1 March through to the end of May 2020, but could be extended for a longer period.
To be eligible, the following conditions will be taken into account:
- Applicants must be self-employed or a member of a trading partnership,
- Have lost trading profits due to COVID-19,
- Have filed a tax return for 2018-19. Late filers will have four weeks from 26 March 2020 to do so,
- Have traded in 2019-20; be currently trading at the point of application (or would be except for COVID-19) and intend to continue to trade in the tax year 2020-21,
- Have trading profits of less than £50,000 and more than half of total income from self-employment. This can be with reference to at least one of the following conditions:
- Your trading profits and total income in 2018-19,
- Your average trading profits and total income across up to the three years between 2016-17, 2017-18, and 2018-19.
If you are eligible HMRC will contact you and will use existing data to make this judgement. The initial three-month grant is likely to be paid directly into a nominated account in one lump sum. The grants are expected to be paid at the beginning of June.
Universal Credits and Business Continuity Loans are available to tide people and businesses over until June.
For Directors that pay themselves a combination of a low salary and dividends are not covered under the Self-employed Scheme. But will be covered for their salary under the Coronavirus Job Retention Scheme, if they are operating PAYE schemes. At the moment it looks as though the eligibility will be based upon their base salary alone and only if there is a proven PAYE record.
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