Yesterday the government announced the much anticipated financial support package for the self-employed. The collect relief sighed by the nations millions of self-employed Musicians, Actors, Tradespeople, small business owners and many more was audible.
Mr Sunak said the steps taken so far were “already making a difference” but it was right to go further “in the economic fight against the coronavirus”.
- Self-employed people will be able to apply for a grant worth 80% of their average monthly profits over the last three years, up to £2,500 a month.
- At least half their income needs to have come from self-employment as registered on the 2018-19 tax return filed in January – anyone who missed the filing deadline has four weeks from now to get it done and still qualify and is based on the average income over the last three years.
- The scheme is open to those who earn under £50,000 a year – up to 3.8 million of the 5 million people registered as self-employed.
- Unlike the employee scheme, the self-employed can continue to work as they receive support.
- The money, backdated to March, will arrive directly into people’s banks accounts from HMRC, but not until June.
- The grants will be taxable, and will need to be declared on tax returns by January 2022.
- Company owners who pay themselves a dividend are not covered.
The scheme does not cover people who only became self-employed very recently – the chancellor said they would have to look to the benefits system for support.
Coming up with a workable scheme had been “difficult”, he continued, because the self-employed were a “diverse population” and some of them have earned a great deal over the years.
But in all, the “fair, targeted and deliverable” plan would help 95% of people who earn most of their income via self-employment.
“We have not left you behind, we all stand together,” he added.
Communities Secretary Robert Jenrick later told the BBC’s Question Time that even where self-employed workers were unable to provide full financial records going back three years, the government was urging people to “give us what they’ve got and we will work through it with HMRC to see if there’s a way to support you”
The Federation of Small Business, which represents many self-employed workers, welcomed the intervention, saying: “Although the deal is not perfect, the government has moved a very long way today.”
This really has to be the main take away from this. The scheme is not perfect but devising a perfect scheme would probably have been impossible and would have taken months. This scheme is workable and should be able to be rolled out quickly. These are the two most important parts of this scheme.
If you want to look at what you may be entitled to then contact your accountant or download your last three years tax returns.
