Covid-19: Support for the self-employed

Self-employed and freelance workers finally received news of the government's coronavirus support package last evening, but the Chancellor's much-mooted bailout is set to make them wait until the beginning of June for the pay-out.

Self-employed Income Support Scheme (SEISS)

The scheme will cover sole-traders and partnerships. The main points are:

  • The scheme will only be open to those who are already self-employed, have lost income due to Coronavirus and have a self-assessment tax return for 2019. Additionally, they should have
    • traded in the tax year 2019-20
    • are trading when they apply, or would be except for COVID-19
    • intend to continue to trade in the tax year 2020-21
  • The taxable grant will cover 80% of average monthly self-employment income and will be capped at £2,500 per month. It will be paid for at least three months, starting 1st March 2020.
  • The grant may be in the form of a lump-sum payment.
  • It will apply to those with trading profits of less than £50,000 a year. This will be calculated using average monthly profits over last three financial years. For persons who have been self-employed for a shorter period, the average monthly profits since they began self-employment shall be used for the calculation.
  • Trading income must form more than half of the person’s total income.
  • Grants are expected to start to be paid by the beginning of June 2020.
  • HMRC will contact eligible taxpayers by the beginning of June, inviting them to apply. Please do not contact HMRC now.
  • As a concession, the Chancellor announced that anyone who is late in filing their 2019 self-assessment tax return will now have till 23rd April 2020 to file it to be eligible for this grant.
  • HMRC will use data on 2018-19 returns already submitted to identify those eligible and will risk assess any late returns filed before the 23 April 2020 deadline in the usual way.

Details of eligibility criteria and how to access this scheme is available here.

By basing the calculation of the grant on self-employment profits, the scheme excludes self-employed persons who have incurred trading losses on average in the past three years. The scheme also excludes people who have become self-employed after 5th April 2019.

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