The Chancellor has announced measures of support for freelancers and the self-employed impacted by COVID-19.
This page was updated on 14 July 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 began contacting eligible customers and inviting them to go online and check their eligibility for SEISS. The claims service opened on 13 May.
On May 29, the Chancellor Rishi Sunak, announced that the Self-Employment Income Scheme would be extended, with applications opening in August for a second and final grant. It was announced that this 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. More information on how HMRC works out trading profits and non-trading income for the Self-Employment Income Support Scheme is available here.
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. If you receive the grant you can continue to work.
- 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 on or after 14 July 2020.
- An individual does not need to have claimed the first grant in order to be eligible for the second and final grant.
More information on how different circumstances affect the Self-Employment Income Support Scheme, can be seen through the government's website.
If you want to claim the second and final grant you must make your claim on or before 19 October 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’s first grant 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 on 17 August 2020.
How to apply?
To claim you’ll need your:
- Government Gateway user ID and password
- UK bank details (only provide bank account details where a Bacs payment can be accepted) including:
- bank account number
- sort code
- name on the account
- your address linked to your bank account
You will also need to confirm that your business has been adversely affected due to Coronavirus at the time you make your 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.
You must tell HMRC if you think you:
- have been overpaid
- made a claim in error and were not eligible for the grant
Further details on how to inform HMRC and pay some or all of the grant back is available on the government website.
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