Support for Self-Employed: Explained

Help for the self-employed?

It’s what we’ve been waiting for. The Chancellor’s support package for self-employed folk has arrived; here is our quick guide to support for self-employed.

We've gone through everything released and filtered the important things to know.

Fun fact: There’s FIVE MILLION self-employed workers in the UK and they’ve delayed this a bit whilst they try and work it out but it looks like this:

• You will be able to get 80% of your average monthly profit based on an average of your earnings over the last 3 years (or your most recent tax return depending on length of trading)
• Grants will be paid starting the beginning of June.
• The amount is capped at £2500 per month, it’s TAXABLE income and will arrive as a three month lump sum in the form of a grant.
• It could be extended if lock down goes on for longer, but initially it’s for three months.
  
  

You don’t qualify if:

• Your average annual PROFIT is £50K or more
• You have become self-employed since April 2019

As Columbo said, there’s just one more thing:
At least half of your income must be from self-employment either from your 2018/19 tax return or the average of your last three years of tax returns: 2016/17, 2017/18 and 2018/19 tax returns.

Still with us?
Breathe, hang in there. Have a strong tea and a fruit shortbread and then double check the Government guidance if you’re not sure.

If you haven’t submitted your 18/19 tax return yet, you’ve got until Thursday 23 April; if you miss that you miss out on the scheme.

So, how do I apply?

You’ll be contacted directly by HMRC.
Who knows when – give them a chance to get it up and running and keep an eye on the business news. We’ll put something out as soon as we hear. We reckon you’ll have to fill out a form then the grant will be paid directly into the bank account details that HMRC already have.

​What if I’m a company director?

This isn’t the scheme for you; most likely the Coronavirus Job Retention Scheme will cover your PAYE (but not your dividends – ouch.)

What if I’m not eligible for the Grant?

• You could defer your income tax payments that were due in the summer to January 2021.
• Apply for Universal Credit
  • ​The Government has removed the thing called 'minimum income floor' to the universal credit benefit, and will be boosting the standard allowance from Monday 6 April. For example a single person over 25 could receive around £409.89 per month. Not ideal but better than a kick in the leg. Many countries don’t have anything like this and we are lucky to have several different forms of financial help being offered. Entitled to have a benefits calculator so you can check what you could claim for.

 

• Last resort: you could apply for 'business interruption loan.' We haven’t found out the APR on this scheme yet but anything you borrow, of course you have to pay back. Who knows when we’ll be out of this pickle so you have to be as sure as you can be that this is a viable option.​

This is a really tough time for everyone and we’re here to help. It's all about being smart with what you have. Make sure you continue to put aside for tax if you are continuing to trade as the July self assessment tax payment has been deferred until January 2021.

And more importantly you can continue to trade and make money and it will not affect the grant or the amount.

A watchout: There are also quite a few scams going around claiming to be from HMRC. HMRC will only ever invite you to apply for something through their government gateway portal. If in doubt call HMRC to check.
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Send us your questions, take help if you need it and keep an eye on our survival guide.

Help is coming and it’s ok – we’ve got you.