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How can the self-employed access grants and support following the coronavirus outbreak?

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Updated: 1st June 2020

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?  

Self-Employed Income Support Scheme

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:

  • Trading profits of under £50,000 in 2018/19, or a trading profit of under £50,000 when averaged out between tax years 2016/17, 2017/18, 2018/19
  • Receiving over half of income through self-employment
  • ·Already being in self-employment  
  • Submitting a self-assessment tax return for the 2018/19 tax year – if the January 31st filing deadline has been missed, the government is allowing an additional four weeks from the date of the announcement for the return to be filed

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.

Importantly, self-employed people can continue trading even if applying for a grant. The first payment covering the three months from March to May will be made in June, with the second and final grant payable in August.

How are these cash grants accessed?

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.

Additional support for the self-employed during the coronavirus outbreak

Coronavirus Business Interruption Loan Scheme (CBILS)

CBILS is open for loan applications from self-employed individuals with a business turnover of up to £45 million, and offers loans of up to £5 million. A Business Interruption Payment is also available that covers the first 12-months’ of interest plus the lender’s fees. The scheme is now open for applications, which should be made online to the chosen lender, along with a strong supporting business proposal.

 
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Deferment of VAT and self-assessment income tax

No applications are necessary for deferment of VAT and self-assessment income tax, but if payments are made by direct debit the next payment may need to be cancelled.

Universal Credit

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)

No eviction from commercial premises for three months

Commercial rents are commonly one of the highest outgoings for businesses, but protection from eviction has been put in place for three months up until 30th June. This isn’t a payment holiday, however.

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.

Jonathan Munnery

Partner

0800 644 6080

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