Updated: 3rd March 2021
The Self-Employed Income Support Scheme aims to support the UK’s self-employed by providing cash grants based on monthly profits. So how can these grants be accessed, and what other support is available following the coronavirus outbreak?
The Self-Employed Income Support Scheme is designed to reflect the support provided for employed people in the UK, with eligibility depending on several factors:
How much can self-employed people access?
If eligible, the self-employed will be able to access two cash grants each of which cover a three month period. The first grant pays 80% of their average monthly trading profits for the last three years - up to £2,500 per month, capped at £7,500 for the three month period. The second grant pays 70% of average monthly trading profits and are capped at £6,570. These grants may be subject to income tax and National Insurance.
As announced at the 20201 Budget, the fourth grant will cover a three-month period (Feb-April) and will be based on an average 80% of earnings and will be paid in April. This will be worth 80% of profits.
The fifth grant opens from July and covers the period May - July. This final grant will target those most affected by the Covid pandemic. Those whose turnover has fallen by 30% or more will continue to receive the full 80% grant. Those whose turnover has fallen by less than 30% will receive a 30% grant.
Newly self-employed who were excluded from the first three grants will be apply to apply for the fourth and fifth grants so long as they have filed a 2020 tax return. This amendment means an estimated 600,000 people who did not qualify for previous grants, will qualify for the final two rounds of payments.
HMRC will use information they hold to decide who is potentially eligible, and will be in contact to invite people to apply if they meet the conditions. Applications will be made online, with the cash being paid directly into the self-employed person’s bank account.
It’s important to note that if anyone operating their own company and taking a salary and dividends as remuneration, won’t be eligible for this scheme but may be able to access the Coronavirus Job Retention Scheme if their salary is paid through PAYE.
The self-employed have been encouraged to claim Universal Credit, and the government has suspended the Minimum Income Floor and boosted the Universal Credit standard allowance.
Claims for Universal Credit are made online, and if a self-employed person is living as part of a couple the claim must be a joint one. It’s a means tested benefit, however, and those with savings of £16,000 or more (either singularly or jointly) won’t be eligible. There’s also likely to be a delay in response from the DWP when applying, due to the huge number of claims currently being made.
Contributory Employment and Support Allowance (ESA)
Contributory ESA isn’t means tested and is available for applications by self-employed individuals affected by coronavirus, whether directly, due to caring for a child with the virus, or self-isolation. Applications are made by phone to the Universal Credit Helpline on 0800 328 5644 (option 2)
If you would like more information on the grants and other support available to the self-employed following the coronavirus outbreak, please call our team of experts at Real Business Rescue to arrange a free same-day consultation.
Covid-19 Business Support Guide Get your FREE copy
8th April 2021
Retailers in the UK are generally against the idea of having customers be required to present paperwork as evidence of being vaccinated against Covid-19.Read More
7th April 2021
Cinemas chains are concerned that government plans to implement ‘vaccine passport’ policies will hinder their recovery from the Covid-19 crisis.Read More