‘You have not been forgotten’, was the message that Chancellor of the Exchequer Rishi Sunak issued last night as he announced measures to help support the self-employed throughout the coronavirus pandemic.
If the self-employed have suffered a loss of income, a taxable grant will be paid, worth up to 80% of their profits up to a cap of £2,500 per month. The payment will be backdated to March and will be paid in one lump sum. However, payments will not start to arrive until the beginning of June.
Called the Coronavirus Self-employment Income Support Scheme, it is open to those who were trading in the last financial year, still trading now, and planning to continue doing so this year. This will hopefully be welcome news to self-employed garment decorators who have found themselves out of work in recent weeks.
The scheme is open to those with a trading profit of less than £50,000 in 2018-19 or an average trading profit of less than £50,000 from 2016-17, 2017-18 and 2018-19.
It is thought this scheme will help up to 3.8 million of the five million people registered as self-employed in the UK.
Those who are recently self-employed and do not have a full year of accounts will not receive any help under this scheme.
How to apply for the grant
This grant will cover 95% of the self-employed who make most of their money from self-employment. This is how it works:
- HM Revenue and Customs (HMRC) will use existing information to identify those eligible and will invite applications.
- The application will require them to confirm that they meet the eligibility requirements.
- It will be paid straight into a bank account, which eligible taxpayers will need to confirm on their application form.
- People do not need to contact HMRC now, if they are eligible HMRC will contact them directly.
This scheme is similar to a plan that the Government has already announced for those who are employed.
The government says 80% of gross wages in the private sector, up to £2,500 a month, for those not working and who would otherwise have been laid off will be covered by these grants from HM Revenue and Customs (HMRC).
These will be backdated to March and the scheme will last three months at least. The idea is to prevent mass unemployment.