Government Scheme for the Self-Employed
On 26 March 2020, Rishi Sunak finally announced, and outlined, his scheme for the self-employed. While this will be welcome relief for many, there are already concerns among the self-employed that if the grants are not available until June, it could be too late.
The Scheme is similar to the Coronavirus Job Retention Scheme for employees, in that self-employed individuals will be able to claim a grant of up to 80% of their average monthly income, capped at £2,500.We are still awaiting further Guidance, but I have set out below what we know for now.
Firstly, the Scheme is only available to those who submitted a 2019 tax return (and there is a provision which gives individuals a further four week window to submit their 2019 tax return, if they have failed to do so to date), which seemingly means that if you have only recently started your business, or become self-employed, you will be ineligible for the grant. Furthermore, the grant is only available to individuals with a trading profit of no more than £50,000. Mr Sunik has suggested this will cover 95% of the self-employed, but that will be of little comfort to the 5%.
Unlike furloughed employees who cannot undertake any work to be eligible for their grant, self-employed individuals will be permitted to carry on their business while claiming the grant. While finally, the calculation of average monthly income will be based on average income over the previous three years.
This is pretty much all we know about the Scheme to date, but I will provide a further update, once the Scheme Guidance has been published. James Twine – Partner & Head of Business Services