Editor AccountingWEB
Share this content
Rishi Sunak
HM_Treasury_aw

Help announced for coronavirus-hit self employed

by

Self-employed and freelance workers finally received news of the government's coronavirus support package on Thursday evening, but the Chancellor's much-mooted bailout is set to make them wait until the beginning of June for the pay out.

26th Mar 2020
Editor AccountingWEB
Share this content

Telling self-employed workers that “you have not been forgotten”, Rishi Sunak’s third appearance at the daily Downing Street press briefing focused on new support for this, until now, overlooked part of the UK workforce affected by the coronavirus crisis.

“I know that many self-employed people are deeply anxious about the support available for them… To you, I say this: You have not been forgotten. We will not let you behind. We are all in this together,” said Sunak.

Sunak’s biggest lifeline to struggling self-employed was a new self-employed income support scheme that treats these workers with the same parity as furloughed employees, under the coronavirus jobs retention scheme.  

The new scheme will pay those “who make the majority of their income from self employment” 80% of average monthly profits for the last three years up to a maximum of £2,500.

Sunak confirmed that the scheme will be open for “at least three months” but as he has done with other COVID-19 measures, he has the option to extend it if necessary.

Register for free to continue reading

It’s 100% free and provides unlimited access to the latest accounting news, advice and insight every day. As well as access to this exclusive article, you can:


Content lock down, tick icon

View all AccountingWEB content


Content lock down, tick icon

Comment on articles


Content lock down, tick icon

Watch our digital shows and more

Access content now

Already have an account?
Tags:

Replies (61)

Please login or register to join the discussion.

avatar
By Robert Hurn
27th Mar 2020 16:21

Do the self-employed earning less than their personal allowances qulaify for the grant? I have a cleaner earning circa £9,000 per annum, no other incoem so pays no tax

Thanks (0)
Replying to bobhurn:
avatar
By seitler
27th Mar 2020 17:25

yes , why should the cleaner not qualify ?

Thanks (0)
avatar
By Gone Sailing
27th Mar 2020 17:24

If HMG is reading this, also looking out for those who incorporated in IT year 2019/20 and have submitted SAs for years.

Thanks (0)
avatar
By seitler
27th Mar 2020 17:28

what I am perplexed about is that unlike furloughing staff this seems to be a grant paid even if the self employed person continues to work. So would say delivery driver whose work may boom during the crisis or at worse be similar to normal be able to claim ? these people could end up better off than before. I'm wondering if there would be a clawback if your income exceeded 12 x £2500 in 19/20 ? (a bit like child benefit)

Thanks (2)
Replying to seitler:
avatar
By Elvis11
28th Mar 2020 12:01

Agreed. So far we do not know

1) What measure they are going to use to determine income (taxable profit after capital allowances, before capital allowances, net adjusted income-as per Child Benefit/£50,000 threshold)

2) How losses will be treated? Will they be treated as Nil in the averaging calculation or a negative value?

3) How they are going to assess eligibility in relation to this condition "have lost trading/partnership trading profits due to COVID-19". Does this suggest the possibility of a clawback further down the road?

We need clarity on these matters ASAP. I have (understandably) been inundated with enquiries, but at the moment cannot advise clients fully. HMRC need to publish full details of the scheme without delay.

Thanks (1)
Replying to Elvis11:
avatar
By Elvis11
28th Mar 2020 12:05

In addition, the £50,000 cliff edge seems absurd. Why are people who are over this threshold not entitled to the £2,500 top limit? Irrational and unfair in relation to the situation for employees.
Also, I found it hard to believe the Chancellor's claim that 95% of the self-employed will have average profits under £50,000.

Thanks (0)
avatar
By paulsimmons
28th Mar 2020 17:06

How would the grant calculation work for a person with profits over £50k in 2016/17 followed by losses in 2017/18 an 2018/19?

Thanks (0)
avatar
By Psychic Sue
28th Mar 2020 23:41

So my clients are asking what their averages are over the last 2 or 3 years.
I am slightly confused. Do we take Average Trading Profits before or after AIA

Thanks (0)
Replying to Psychic Sue:
avatar
By Elvis11
29th Mar 2020 12:01

The definition of income has not yet been announced. Vital information which is required ASAP. In addition, how will losses be treated within the three year period?
And what is actually meant by "have lost trading/partnership trading profits due to COVID-19" in practical terms? Might there be a clawback if profits are recovered before the end of 20/21?

Thanks (0)
Replying to Psychic Sue:
x
By rockallj
29th Mar 2020 17:15

Trading profits are after AIAs/ CAs. It's been like this for years.

In the past, CAs were a charge on income. But that went, what 10 years ago, so profit nowadays is always including CAs/AIAs etc.

Thanks (0)
avatar
By tanyajackson
03rd Apr 2020 07:51

On a technical note....
Client's are obviously keen to know what they can claim. Does anyone know what HMRC consider "Trading Profits" on which the grant is calculated.
Are we talking
- Taxable Profits
- Net profits from your accounts
- does it include depreciation
- If it's taxable profits, are we removing capital allowances

Is there are guidelines on how to reach that all important figure?

Thanks (0)

Pages