Who will be eligible for the scheme?
In order to apply to the new Self-employment Income Support Scheme, the following must apply:
- You must earn more than half of your total income from self-employment. This must have been the case for either your 2018/19 tax return or the average of your 2016/17, 2017/18 and 2018/19 tax returns (or both).
- Your average annual trading profit must be less than £50,000. Again, this must have been the case either for your 2018/19 tax return or the average of your 2016/17, 2017/18 and 2018/19 tax returns (or both). This is effectively a ‘cliff-edge’ requirement – so those whose average annual trading profit is £50,000 or more won’t be able to get any support at all.
- You must have filed a tax return for 2018/19. This means you must have been self-employed prior to 6 April 2019. If you were due to file a 2018-9 tax return but missed the deadline this year, you’ll have until 26 April to submit your tax return and then you can still access the scheme.
How much could the grants be worth?
The grants will be worth 80% of your profits, capped at £2,500 per month. This will be calculated based on your tax returns for 2016/17, 2017/18 and 2018/19 if you were self-employed over that period.
If you became self-employed since April 2018, your 2018/19 tax return will be used instead. However, it’s worth noting that if you only have a few months’ self-employment on your 2018/19 tax return, this will be counted as your total profit for the year.
How do I apply to the scheme?
Those who are eligible for the scheme will be contacted by HMRC directly in due course. At that point, you’ll be asked to fill in an online form, and the grant will then be paid directly into your bank account. There are no dates as to when this will be yet.
There’s no point contacting HMRC yet as there’s nothing you can do to apply at this stage. If you believe you’re eligible and don’t hear anything when HMRC does start contacting people, it’ll be worth contacting HMRC at that stage.
I’m not eligible for a grant – what other help is available?
Not all self-employed people can access this help – for example, if you earn more than £50,000 per year or less than half of your income is from self-employment. If you don’t meet the eligibility requirements, unfortunately, you won’t be able to claim, but there are other things you can try:
- You can apply for a business interruption loan. The temporary Coronavirus Business Interruption Loan Scheme is open to self-employed people and offers access to loans, overdrafts, invoice finance and asset finance of up to £5 million for up to six years.
- The Government could also give you a Business Interruption Payment to cover the first 12 months of interest and fees on the loan.
- The scheme is now open for applications and is offered by all major banks.
- You can defer your income tax payments. If you have payments on account due in July 2020 because of your , you can defer them until January 2021.
- Full Universal Credit is available. The Government has removed the minimum income floor to universal credit, and will also be boosting the standard allowance from 6 April – meaning a single person aged over 25 could get a standard monthly allowance of £409.89.