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Self-employed support package

Support available up to April 2021 for freelancers and the self-employed impacted by COVID-19.

This page was updated on 25 November 2020. 
 

  • Rishi Sunak, the Chancellor of the Exchequer, made a financial statement on March 26 to launch the Self-Employed Income Support Scheme for self-employed individuals that are impacted by COVID-19. 
  • On September 24, the government extended the scheme which will run for another 6 months from November 2020 to April 2021. 
  • On November 5, the Chancellor increased the value of the next self-employed income support grant from 55% to 80% of average profits.
  • For further details on the extension of the Self-Employment Income Support Scheme, please see here.    

Extended Self-Employed Income Support Scheme (November 2020 - April 2021)

First Grant

The first grant will cover a three-month period from the start of November 2020 until the end of January 2021. This will cover 80% of average monthly trading profits, paid out in a single instalment covering 3 months’ worth of profits up to £7,500 in total. 

The online service to claim the next grant will be available from November 30 2020 and claims must be made on or before 29 January 2021. Eligible individuals do not have to have claimed the previous grants to make a claim. 

Eligibility

Individuals who were not eligible for the previous Self-Employed Income Support Scheme grants (based on the information in their Self Assessment tax returns), will not be eligible for the next grant. 

To be eligible for the scheme, individuals must:

  • be self-employed or a member of a partnership (You cannot claim the grant if you trade through a limited company or a trust) 
  • have traded in both tax years: 2018 to 2019 (submitting your Self Assessment tax return on or before 23 April 2020 for that year) and 2019 to 2020

  • declare that you intend to continue to trade and either:

The government has published the full eligibility criteria here

How to claim

To claim you’ll need your:

  • Self Assessment Unique Taxpayer Reference (UTR) 
  • National Insurance number 
  • 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

Key Points to note:

  • The grants are taxable income and also subject to National Insurance contributions and must be reported on your 2020 to 2021 Self Assessment tax return
  • You must maintain records of your claim 
  • Different circumstances can affect your eligibility for the scheme 
  • To assess eligibility HMRC reviews your 2018 to 2019 Self Assessment tax return. Your trading profits must be no more than £50,000 and at least equal to your non-trading income (The government has published guidance on how HMRC will work out your trading profits and non-trading income)
  • If you’re not eligible based on the 2018 to 2019 Self Assessment tax return, HMRC will then look at the tax years 2016 to 2017, 2017 to 2018, and 2018 to 2019
  • You must make the claim yourself and not ask a tax agent or adviser to claim on your behalf (this will trigger a fraud alert, resulting in a delayed payment)

Further information on how to claim the next grant is available through the government website

Second Grant

The second grant will cover the period from February 2021 to the end of April. The government will review the level of the second grant and set this in due course.

If you are Self-Employed, the Greater Manchester EnterprisingYou programme can offer expertise and advise. 

Find out how EnterprisingYou can help you during lockdown

Self-Employed Income Support Scheme (May - October 2020)

First Grant

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.

Eligibility

  • 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

Second Grant - The service is now closed for the Self-Employment Income Support Scheme. You can no longer make a claim for the second grant.

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 closed on 13 July 2020.
  • For the second grant, applications closed on October 19 2020. 

To check the status of your payment or if HMRC have asked you to update your details for your claim you can use the online service on the government website.

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. Businesses can also register for a webinar providing an overview of the scheme, and information on how to claim the second grant through the government portal, here

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

Coronavirus Business FAQ's

More information is available on the UK Government’s Coronavirus Business Support website. For more personalised advice call us on: 0161 237 4128 or email us at: BGH@growthco.uk

 

The information provided is meant as a general guide only rather than advice or assurance. GC Business Growth Hub does not guarantee the accuracy or completeness of this information and professional guidance should be sought on all aspects of business planning and responses to the coronavirus. Use of this guide and toolkit are entirely at the risk of the user. Any hyperlinks from this document are to external resources not connected to the GC Business Growth Hub and The Growth Company is not responsible for the content within any hyperlinked site.

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