Covid-19 Update - The Chancellor announces the 'Self Employed Income Support Scheme'
Covid-19 Update – The Chancellor announces the ‘Self Employed Income Support Scheme’
Thu 26 Mar 2020
This evening, the Chancellor has announced the much anticipated financial support for the self-employed: the Self-employed Income Support Scheme (The Scheme)
The Scheme will pay a taxable grant of 80% of average monthly profits over the last 3 years (based on the tax returns filed for the 3 years to 5 April 2019) up to a maximum of £2,500. This scheme will run for 3 months, but can be extended if necessary. This level of grant and time period has been designed to be in line with the Coronavirus Job Retention Scheme (CJRS), the scheme to support the employed that was announced last week (more information expected on CJRS from the Government shortly – see our earlier article for more details.
Conditions
Based on the current details announced, the qualifying conditions for the Scheme are:
- This will be open to people with trading profits of up to £50,000.
- The majority of income must be from self-employment.
- Only available to those who have submitted tax returns with self-employment income for 2019. The Chancellor has given those who have not filed 2019 tax returns four weeks to submit these in order to qualify.
Administration
HMRC will administer the scheme and will contact all eligible individuals directly to ask them to apply and payments will be made in one lump sum. This is expected to be up and running by June. Those who have not been self-employed for three years, the grant will be based on the one or two returns filed. Those who started self-employment after 6 April 2019 will not qualify for the scheme.
There is clearly a delay between the loss of income and the grants through this scheme, the Chancellor recommended those with cash flow issues to utilise Universal Credit and the Business Interruption Loan Scheme.
A future change?
The Chancellor made ‘an observation’ that it does not seem right that the self employed are subject to a different tax regime when they are being supported in the same way as the employed. This suggests there are changes on the horizon for the taxation of the self-employed in the future.
For more details or support, please get in touch with your usual Mazars contact or e-mail jon.capper@mazars.co.uk or ian.goodwin@mazars.co.uk
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