New Grant Available for Self-employed Individuals

After increasing demand to help the 5 million self-employed people in the UK, the Chancellor of the Exchequer’s announcement at 5pm on Thursday 26th March 2020 focused on just this.

Information as of Thursday 26th March 2020 at 7pm UK

Rishi Sunak detailed measures to help the 15.3% of the UK's workforce affected by coronavirus but said this had been a complex task due to income variations. The new proposals are as follows:

  • A taxable grant worth 80% of your average monthly profit over the last three years will be available. This will be paid up to a maximum of £2,500 per month.
  • This will be available for at least three months and will be payable no later than the end of June 2020.
  • The amount due will be backdated to March 2020 and paid as one lump sum.
  • If you are eligible, HM Revenue & Customs (HMRC) will contact you directly. You will need to claim the money by filling in a form and this will be paid directly into your bank account.
  • The scheme is open to anyone with trading profits up to £50k but will only be available to those who earn at least half their income from self-employment.
  • Only those already in self-employment and having completed a 2018/9 tax return will be able to apply.
  • Anyone with a tax return still outstanding has four weeks to submit a 2018/19 tax return to qualify.
  • You can continue to work while receiving support.
  • Company owners who pay themselves a dividend are not covered.
  • The grant will need to be included in your 2021/22 tax returns and taxed accordingly.
  • Self-employed individuals can also access business interruption loans.

The Chancellor has said this scheme should cover 95% of people in self-employment. If people need instant cash resources, they can still claim Universal Credit. There is currently a five week wait for Universal Credit; however, advance payments should be available.

If an individual does not have three years' worth of accounts, HMRC will look at whatever they do have - for example, if it's just one year, they will use that. Anyone who has not yet completed a tax return will not receive a payment.

The Chancellor has implied that this measure will lead to an equalisation of taxes in the future between the self-employed and employed population.

If you are self-employed or an employer who has self-employed workers, please contact Kiki Stannard or Carla Graves to discuss your specific circumstances:

Kiki Stannard
Partner
Tel: +44 (0)20 7430 5913
Email: kstannard@fitzandlaw.com

Carla Graves
Director
+44 (0)20 7430 5936
Email: cgraves@fitzandlaw.com

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