Covid-19 update following announcements
On 26 March 2020, Rishi Sunak announced a support package for the self-employed (the Self-Employed Income Support Scheme or S-EISS).
This principally looks to equalise the measures for the self-employed to those he previously announced for employed (but furloughed) individuals under the Coronavirus Job Retention Scheme (CJRS).
A summary of S-EISS is as follows:
- A taxable grant of up to £2,500 per month, calculated by reference to 80% of average monthly profits for the last 3 tax years.
- To the extent that individuals have less than 3 years of self-employment tax returns, the grant will be calculated with reference to those tax returns that have been filed. If you have no self-employed tax returns, for whatever reason, support under SISS will not be available.
- The eligibility criteria require individuals to:
- have submitted their Self-Assessment tax return for the tax year 2018 to 2019. This tax return must be submitted by 23 April 2020 or the individual will not be eligible to claim under the SISS.
- have traded in the tax year 2019 to 2020.
- be trading when they apply or would be except for the coronavirus.
- intend to continue to trade in the tax year 2020 to 2021.
- have lost trading / partnership profits due to coronavirus. It is not clear if this will result in a clawback of the grant if this is proven not to be the case.
- confirm to HMRC that their business has been adversely affected by coronavirus.
- have trading profits of no more than £50,000, which must constitute more than half of the individual’s total income, for either:
- the tax year 2018 to 2019; or
- the average of the tax years 2016 to 2017, 2017 to 2018 and 2018 to 2019.
- The scheme will be open for at least 3 months backdated to 1 March 2020.
- HMRC will aim to contact eligible individuals by mid-May and invite them to claim using the GOV.UK online service. For the avoidance of doubt, the online service is not available yet.
- HMRC will make payments by early June. Accordingly, eligible selfemployed individuals may receive three months of the grant in one go.
- Self-employed individuals eligible for the grant will still be able to “continue to do business” or take on other employment including voluntary work.
For many, we appreciate that June 2020 feels like a long wait for financial support, something the Chancellor was cognisant of. Given the complexity administering the scheme and setting up a new system for applications, he does not believe the timetable can be accelerated. The Coronavirus Business Interruption Loan Scheme (CBILS) is available to the self-employed and there is access to the enhanced welfare benefits system through Universal Credit. Also, as previously announced, self-employed individuals can defer their July 2020 tax payment on account to January 2021.
For more information
For more information on any of the Coronavirus support packages, please contact us on: