“I am pleased the Chancellor has announced further measures, which will provide support for those who are self-employed. The Government’s Self-Employed Income Support Scheme will ensure that those who work for themselves receive financial support at this difficult time.
The scheme will pay self-employed people throughout the UK who have been adversely affected by coronavirus a taxable grant worth 80 per cent of their average monthly profits over the last three years, up to £2,500 per month. This grant will cover a period of three months and will be extended if necessary.
In order to qualify for this support, you must have trading profits of less than £50,000 per annum, and HMRC will require that you demonstrate the majority of your income comes from self-employment. Those applying must have filed their accounts for 2018-19 to qualify. However, those who have yet to file their 2018-19 accounts will still be eligible, so long as these are filed within the next four weeks.
Those eligible will be contacted directly by HMRC, who will request they complete a simple online form. Once approved, the grant will be paid into the bank account specified on the form. The Government and HMRC are working tirelessly to get this scheme up and running, and it will be fully functioning by the beginning of June.
Understandably, there will, of course, be concern at potentially having to wait until the beginning of June before these measures are in place. As you will appreciate, a scheme of this nature is entirely without precedent and must be developed from the ground up, which is by any standards a very major undertaking. As the Chancellor explained, providing support for self-employed people is operationally very challenging, as everyone’s circumstances vary greatly.
The Government, therefore, is in the process of creating a scheme which can take account of these variations, but also remain fair. However, without any previous programme upon which this can be developed, it is understandably going to take Treasury officials, who are already working day and night to get this up and running, some time to complete the scheme.
The Job Retention Scheme, due to be in place by late April/early May, will be developed in parallel with this scheme but, as mentioned, the four week extension for those yet to file their accounts will necessitate an additional delay to the introduction of the Self-Employed Income Support Scheme.
Nevertheless, there are, of course, many self-employed people experiencing financial difficulties now. This is why the Government has taken steps to make Universal Credit more accessible to the self-employed, and more generous overall. Those applying for Universal Credit can also get an advance payment almost immediately once they claim.
On top of this, the Government has put extra resources into local authorities to ensure that they are able to reduce or eliminate the council tax bills for those most in need. Additionally, the self-employed are able to access business interruption loans, up to a value of £5 million with no personal guarantees required for security on the first £250,000, while self-assessment income tax payments can be deferred to the end of January next year.
The Government has also announced measures to help people with the cost of living. Those who are self-employed can benefit from a three-month mortgage holiday and defer the next three months of VAT, alongside further measures to protect renters and to help people with their energy bills.
Unlike employees, covered through the Job Retention Scheme, the self-employed can also benefit from the income support scheme while still working.
As you can appreciate, this is a fast-moving situation. I would strongly encourage you to monitor the Government’s website for the most up to date guidance and support for businesses and individuals in Wales; you can find this through the following link:
At the December 2019 General Election, David was re-elected as the Member of Parliament for Clwyd West, with an increased vote share of 50.7%.