Covid-19: Help for the self-employed

Published: 31/03/2020

Chancellor Rishi Sunak has announced a rescue package for the self-employed in response to the coronavirus.

The Coronavirus (Covid-19) Self-employment Income Support Scheme is open to the self-employed and members of a partnership, if you have lost income due to the current pandemic.

The scheme allows you to claim a taxable grant worth 80% of your trading profits, up to a cap of £2,500 a month, for the next three months (this may be reviewed depending on how long the crisis lasts). This will start to be paid from June onwards at the earliest.

You’ll need to meet the following criteria:

  • Have submitted your Income Tax Self-Assessmenat for the 2018-19 tax year.
  • Have traded in the 2019-20 tax year.
  • Are currently trading, or at least would have been if the pandemic hadn’t happened.
  • Will intend to continue trading once everything returns to normal.
  • Have lost trading, and or partnership, trading provides because of coronavirus.

The scheme will be open to you if you have 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.

If you are recently self-employed, and therefore do not have a full year of accounts, unfortunately you will not be eligible for this scheme.

How do I apply for the scheme?

HMRC will contact you directly if you are eligible and invite you to apply online. Once you’ve had this confirmation and applied, HMRC will contact you to tell you how much you will get, and when. It will be paid out in a lump sum.

Please note, if you pay yourself a salary through your own company, you will not be covered by this scheme. Instead, the Corovavirus Job Retention Scheme if operating through PAYE will apply.

What other help is currently available?

Income tax

Income tax payments on account due in July 2020 under the Self Assessment system may be deferred to January 2021.

HMRC Time to Pay scheme

If you are in financial distress, and with outstanding tax liabilities, you may be eligible for HMRC Time to Pay scheme, which offers support with tax affairs. This is decided on a case-by-case basis and you must pay tax to the government and also have outstanding tax liabilities. Find out more.

Employment and Support allowance (ESA) or Universal Credit

The Chancellor announced on the 20h March 2020 that the access to Universal Credit for the self-employed would be ‘quicker and easier’, as well as to a new style ESA that will give you the equivalent to Statutory Sick Pay (SSP) if you’re ill.

Self-employed claimants who are on Universal Credit who have to stay at home, or are ill because of coronavirus, will not have a Minimum Income Floor (which is an assumed level of income) applied for a period of time during the pandemic. Find out more.

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