Government announces Self-Employed Income support scheme

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The NHBF continues to support the industry with resources and info over the coronavirus crisis. Here’s their latest bulletin. The government has tonight announced a support package for the self-employed.  The package will be available for three months, but like other business support measures announced, this will be kept under review.

Key points include:

  • A taxable grant of 80% of their average monthly profits over the last three years, based on tax returns filed.  They must have filed a tax return for 2018-19.  The maximum payable will be £2,500 per month, the same maximum as for ‘furloughed’ employees.
  • If a self-employed person does not have 3 years of tax returns, the grant will be paid based on whatever tax returns the individual has submitted.  If tax returns for 2019 have not yet been filed (they were due by 31 January 2020), self-employed people now have four weeks to get them submitted.
  • Self-employed businesses which have a trading profit of £50,000 or less and who make most of their income from self-employment will be eligible to claim the grant.
  • Those who pay themselves a salary and dividends through their own company are not covered by the scheme but will be covered for their salary by the Coronavirus Job Retention Scheme if they are operating PAYE schemes.
  • There will be a delay while HMRC sets up new systems to process the grants, which are not expected to be available until early June.  HMRC will contact self-employed people who have filed returns to ask them to fill in an online form.  The grant will then be paid as a single payment covering three months straight into the individual’s bank account.
  • In the meantime, the self-employed can access business interruption loans which are available interest-free for 12 months.
  • Self-employed people can access Universal Credit at the same rate as Statutory Sick Pay is paid for employees.  The minimum income floor for Universal Credit has been suspended for everyone affected by the coronavirus so a self-employed person with no income should be able to claim Universal Credit at a similar rate to someone who is unemployed.  The Chancellor also said that advance payments can be made ‘within days’ after a claim is submitted, rather than the usual wait of 5 weeks.

Hilary Hall, NHBF chief executive said, “We’re delighted that the Chancellor has announced this support for the self-employed, although we would like to have seen payments being processed earlier than June.  We know that many self-employed stylists, barbers and beauty therapists have been extremely worried about money and their finances will already be stretched.”

She added, “The Chancellor warned that the self-employed will be expected to ‘pay in equally’ in the future because they don’t pay as much into the system as employees do, yet were being provided with government support which is similar to what employees get.  He may be signalling changes such as self-employed people making pension contributions, National Insurance Contributions changes or bringing in IR35 sooner.  This may prompt self-employed stylists, barbers and beauty therapists to reconsider whether they want to continue as self-employed, or switch to employment.”

For further information about coronavirus please visit the NHBF hub:

https://www.nhbf.co.uk/coronavirus/

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