Self-employed
What is it?
The Self-employment Income Support Scheme (SEISS) will support self-employed individuals (including members of partnerships) whose income has been negatively impacted by COVID-19. The scheme will provide a grant to self-employed individuals or partnerships, worth 80% of their profits up to a cap of £2,500 per month.
HMRC will use the average profits from tax returns in 2016-17, 2017-18 and 2018-19 to calculate the size of the grant. The scheme will be open to those where the majority of their income comes from self-employment and who have profits of less than £50,000. The scheme will be open for an initial three months with people able to make their first claim by the beginning of June.
Am I eligible?
To be eligible for the scheme you must meet all the criteria below:
- Be self-employed or a member of partnership;
- Have lost trading/partnership trading profits due to COVID-19;
- File a tax return for 2018-19 as self-employed or a member of a trading partnership. Those who have not yet filed for 2018-19 will have an additional 4 weeks from this announcement 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 to 2021
- Have trading profits of less than £50,000 and more than half of your total income come 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.
How do I access it?
Individuals should not contact HMRC now. HMRC will use existing information to check potential eligibility and invite applications once the scheme is operational. HMRC will then pay the grant directly to eligible claimants’ bank account. HMRC is urgently working to deliver the scheme; grants are expected to start to be paid out by beginning of June 2020. For eligible individuals who have not submitted their returns for 2018-19, they will have 4 weeks’ notice from the date of the announcement to file their returns and therefore become eligible for this scheme.
HMRC are publishing guidance on the scheme, available here. This guidance will continue to be updated.
When can I access it?
HMRC is urgently working to deliver the scheme; grants are expected to start to be paid by the beginning of June 2020. This time is necessary to ensure that the scheme is both deliverable and fair. In the interim the self-employed will still able eligible for other government support including more generous universal credit and business continuity loans.
Further information on how to access these schemes can be found here.
Further details
- The Government is deferring income tax self-assessment payments due in July 2020 to January 2021. This is an automatic offer with no applications required.
- The Government is supporting people through the welfare system so that nobody is penalised for doing the right thing. Those on contributory ESA will be able to claim from day 1, instead of day 8. And the Government is relaxing the requirement for anyone to physically attend a jobcentre – everything can be done by phone or online.
- The Government is increasing Universal Credit and Working Tax Credit by £1,000 a year – a cash injection of nearly £7 billion in the welfare system. The Universal Credit standard allowance is being increased for the next 12 months, by £1,000 a year. Working Tax Credit will also increase by the same amount for a year.
- The minimum income floor is suspended for twelve months. That means self-employed people can now access, in full, Universal Credit at a rate that is equivalent to Statutory Sick Pay for employees.
- A three month mortgage holiday has been introduced for those in difficulty due to coronavirus. So that people will not have to pay a penny towards their mortgage while they get back on their feet.
- Self-employed people may be eligible to receive support with their tax affairs through HMRC’s Time to Pay service. Arrangements are agreed case-by-case. Businesses can contact HMRC’s new dedicated COVID-19 helpline 0800 024 1222.
- The Coronavirus Business Interruption Loan Scheme is available to self-employed individuals with an eligible business entity. By providing an 80 per cent government guarantee on finance facilities up to £5 million, this scheme will help more businesses access the finance they need. Info here: https://www.businesssupport.gov.uk/coronavirus-business-support/
- The Government has delayed changes to IR35. The Government has delayed bringing in changes to IR35 from April 2020 until April 2021, giving self-employed people more time to prepare for the reforms.
- Introducing emergency legislation to protect renters, so that no one gets evicted if they cannot pay their rent. Emergency legislation will be taken forward as an urgent priority so that landlords will not be able to start proceedings to evict tenants for at least a three-month period. As a result of these measures, no renters in private or social accommodation needs to be concerned about the threat of eviction.
- Introducing new emergency measures with the energy industry to keep gas and electricity flowing. New emergency measures with the energy industry will protect those most in need. Customers with pre-payment meters who may not be able to add credit can speak to their supplier about options to keep them supplied, benefitting over 4 million customers. More broadly, any household in financial distress will be supported by their supplier, which could include debt repayments and bill payments being reassessed, reduced or paused.
Aren’t you expecting self-employed people to get by on £94 a week – how is that fair?
- SSP would only be for a 14 day period if someone needs to take time off from their self-employed work.
- But SSP is also available in addition to UC and other benefits – such as child benefit and council tax support.
How are these measures for the self-employed different to what has already been announced at Budget?
- The Budget announce a temporary relaxation of the earnings rules (known as the Minimum Income Floor) for self-employed claimants who are sick or self-isolating according to government guidance. This has already come into effect.
- This announcement is relaxing the rules for all self-employed claimants, not just those directly impacted by the virus, ensuring those affected by the economic impact of the outbreak are supported, and feel able to follow government guidance on self-isolation and social distancing.
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