The Chancellor has announced measures of support for freelancers and the self-employed impacted by COVID-19.
This page was updated on 2 June 2020.
Rishi Sunak, the Chancellor of the Exchequer, made a financial statement on Thursday 26th March to launch the Self-Employed Income Support Scheme for self-employed individuals that are impacted by COVID-19. From May 4 HMRC will begin contacting customers who may be eligible. HMRC is inviting customers, or their agents, to go online and check their eligibility for SEISS. The claims service will open on 13 May.
On May 29, the Chancellor Rishi Sunak, announced that the Self-Employment Income Scheme will be extended, with applications opening in August for a second and final grant. It will be paid out in a single instalment, covering three months’ worth of average monthly trading profits. The value of the final grant will be 70%, up to a total of £6,570.
For further details on the extension of the Self-Employment Income Support Scheme ,please see here.
Self-Employed Income Support Scheme
- The Self-Employed Income Support Scheme will provide self-employed people a guaranteed income of 80% of their trading profit, up to £2,500 per month for at least three months.
- The scheme is open to individuals with a trading profit of £50k or less in 2018-19 or an average trading profit of less than £50k from 2016-17, 2017-18 and 2018-19.
- More than half of the individual's income must come from self-employment
- Only those already in self-employment and with a tax return from 2019
- Businesses that can file tax returns for the 2018/19 financial year should do so as soon as possible to be eligible
- The self-employment scheme does not apply to company director’s PAYE salary; however they may be eligible for support from the Job Retention Scheme.
The eligibility criteria remains the same as the first grant, however there are some changes to the scheme.
- Eligible individuals can claim a taxable grant worth 70% of their average monthly trading profits, paid out in a single instalment covering three months’ worth of profit, and capped at £6,570 in total.
- Individuals will still need to confirm that their business has been negatively affected by coronavirus.
- An individual does not need to have claimed the first grant in order to be eligible for the second and final grant.
- Further information on the second grant will be available on GOV.UK on 12 June 2020.
How will it work?
- HMRC will identify eligible taxpayers and contact them directly once the scheme is operational, to complete an online application and be paid directly into their bank account.
- The scheme will cover three-months pay to May and grants will be paid in one, single payment for all three months from June.
- HMRC is using information that customers have provided in their 2018 to 2019 tax return – and returns for 2016 to 2017 and 2017 to 2018 where needed – to determine their eligibility and is contacting customers via email, text message or letter.
- For the first grant, applications will close on 13 July 2020.
- For the second and final grant, applications will open in August 2020.
How to apply?
In order to receive quick confirmation from the eligibility checker, you will need a:
- Unique Taxpayer Reference (UTR) and National Insurance Number
- make sure details are up-to-date in their Government Gateway account
Once the online check is complete, eligible customers will be given a date when they can submit their claim.
The claims service will open on 13 May, and people will be able to claim on a specified date between 13-18 May, based on their Unique Tax Reference number. HMRC has assigned eligible self-employed individuals a specific date to apply, this can be checked on HMRC’s online checker. People will not be able to apply before their claim date but can claim after that date.
The claims service will open on 13 May. Those eligible will have the money paid into their bank account by 25 May, or within six working days of completing a claim.
GOV.UK has further details about who is eligible for the scheme and how it will work. For information on how to claim, businesses can also see the related government YouTube guidance video.
Our self-employment expert, Hilary Centeleghe, who leads on our Growth and Startup team, has answered some frequently asked questions in the video below relating to how the government's new self-employment measures will affect you.
If you are Self-Employed, the Greater Manchester EnterprisingYou programme can offer expertise and advise. Find out more here.
Visit our FAQs page for more Coronavirus Business related information