COVID-19: Self-Employed Grants Announced By The Government
But you'll have to wait until June ...
POSTED BY ROGER EDDOWES ON 30/03/2020 @ 8:00AM
Chancellor Rishi Sunak announced the self-employed grants last week with help for self-employed and freelance workers, He assured everyone that they will not be left behind, which will be a relief to many ...
These new self-employed grants will help many, but some will still not qualify for them!
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He continued, "I know many self-employed people are anxious about the level of support available to them. We will not leave you behind. We are all in this together!" So, the new scheme of income support means that the self-employed and freelance workers are treated with the same parity as furloughed employees who are covered under the Coronavirus Jobs Retention Scheme.
It will pay those people "who make the majority of their income from self-employment" up to 80% of their average monthly profits from the last three years, up to a maximum of £2,500. The support package will be open initially for 3-months, but could be extended if necessary.
"The scheme has an earnings cap of £50,000 and should cover up to 95% of self-employed workers!"
To qualify, individuals much have filed a 2018/19 self-assessment tax return which should ensure fraud is minimised. People who only started self-employment in 2019/20 need to "look at the extra support available in the welfare system" which is a shame, but understandable.
The Chancellor also gave those self-employed and freelance workers who didn't file their tax return before the 31st January 2020 deadline an additional 4-weeks to get one filed to ensure they are included in the scheme.
"In addition to the newly self-employed, there is little joy for one-director companies!"
It has been mooted that these individuals should be able to claim under the new scheme as if they were self-employed. However, HMRC suggests that if you are a director of your own company and paid through PAYE you should be covered under the Job Retentions Scheme, but how does a director of a one-director company furlough themselves from their own company?
Many directors take a small salary and the rest in dividends, so if you are like this, you'll only get up to 80% of the small amount you're paying yourself already. It's a bit of a dilemma, isn't it? The dividends won't count.
More clarity is coming all the time, but there will definitely be a wait which the systems are put in place. If a self-employed or freelance worker qualifies, HMRC will contact them directly and ask them to complete an online form, which isn't available yet. The grant will come from June onwards and will be backdated to 1st March 2020.
"Remember, you will need to pay tax on anything you receive!"
But what do you do until then? if you've just watched your income disappear in front of your eyes, what can you do right now? Well, the Government recommends accessing a Business Interruption Loan or claiming universal credit in full, but again, there may be a number of reasons a self-employed person may not qualify.
Until next time ...
Would you like to know more?
If you have questions about these new self-employed grants, call me on 01908 774320, leave a comment below or click here to ping over an email and let's see how I can help you.
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About Roger Eddowes ...
Roger trained at Edward Thomas Peirson & Sons in Market Harborough before working at Hartwell & Co, followed by Chancery, as a partner. He started Essendon Accounts and Tax with Helen Beaumont in 2014 as a general practitioner with a hands-on approach.
Roger loves getting his hands dirty, working with emerging, small-to-medium and family businesses to ensure they receive the best possible accountancy advice. Roger utilises an extensive network of business contacts to leverage the best guidance and practical solutions.
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