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Last night Chancellor, Richi Sunak unveiled an 80% income support scheme for UK-based self-employed workers during the Coronavirus outbreak.
He announced that self-employed workers will be able to receive a taxable grant worth 80 per cent of their average monthly profits over the last two years, worth up to £2,500.
This means that self-employed workers will now receive the same support as furloughed workers in employed roles.
However, the support may not be available until early June, more than two months away.
People with trading profits up to £50,000 will be eligible for the funding. They must earn the majority of their income from self-employment and have filed a tax return for 2019 in order to claim.
The Chancellor said he believed the new scheme would benefit 95 per cent of self-employed people and the majority of the high earners who are missed off earn more than £200,000 a year.
If you are self-employed and meet these criteria, the HMRC will contact you directly and pay the appropriate level of income straight into your bank account.
If you have not yet filed your tax return due on 31 January for self-assessment, you have four weeks from 26 March to get it filed.
Such workers can also access business interruption loans and delay their self-assessments due in July to January 2021.
Critics say the wait until June to receive funding could leave self-employed workers to fall through the cracks in the meantime.
Waiting until June is going to be difficult for many self-employed people, but some funding will be available sooner, including benefits such as Universal Credit.
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.