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Government Assistance for the Self-Employed

By March 27, 2020 News

Self Employed Support Scheme

Following the latest announcement on 26th March 2020 on the Governments Support for the Self Employed throughout the COVID -19 Crisis we have put together a number of key points and details on this package.

The main summary points from the scheme are as follows:

  • 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 (23 April 2020) to get it done and still qualify. (Please contact us immediately if your 2019 return is still outstanding so it can be filed)
  • The scheme will be open to those with 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. 
  • Unlike the employee scheme, the self-employed can continue to work as they receive support.
  • he 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 recently became self employed

Whilst this will be very much needed for the majority of self-employed, those with average profits over £50,000 are entitled to nothing under the scheme unlike the job retention scheme for employees, where there is no income cap. Most associate dentists, locums and other self employed medical related professions will have average profits over £50,000 and appear to be left out on a limb.

There was also a potential “sting in the tail” as during the chancellors speech he mentioned that as a result if this scheme he would have to look at aligning the tax treatment of the employed and self employed and we have no doubt that tax rates will have to be increased in the next number of budgets to recoup this vast sums of money being handed out through the support schemes.

Click here for full guidance 

 

As always if you would like further clarity surrounding this scheme contact us at info@exchangeaccountants.com and a member of our team will be in touch as soon as possible to assist you.