On 26 March the UK Government announced a package of support to self-employed individuals. The main points of the proposal are:
- Self-employed individuals can apply for grants of up to 80% of their profits up to £2,500 per month
- The level will be calculated on the basis of the average monthly trading profit over the last three years.
- The Scheme will be 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. The chancellor has indicate that this accounts for 95% of the self-employed.
- If an individual is self-employed and also has other income, more than half of their income in those periods must have come from self-employment
- Only those who are already in self-employment and meet the above conditions will be eligible to apply. It also applies to members of partnerships
- HMRC will contact the eligible participants directly and contact them with guidance on how to apply.
- The grant will cover the three month period to end of May and will be paid in a single lump sum instalment covering all 3 months at the beginning of June. This may cause a cash flow issue for many individuals and through this period they should access the other measures previously announced by the Chancellor, including Universal Credit, income tax and VAT deferrals and also access to mortgage holidays.
- This scheme does not cover those who provide services through their own company and who are paid a salary and dividends. They will be covered by the Coronavirus Job Retention Scheme if they receive their salary by PAYE.
Further information will be produced by HMRC.