Support for the self-employed
Self-employment income support scheme
Who is eligible?
To be eligible for the scheme you must meet all the criteria below:
- Be self-employed or a member of partnership;
- Have lost trading/partnership trading profits due to COVID-19;
- File a tax return for 2018-19 as self-employed or a member of a trading partnership. Those who have not yet filed for 2018-19 will have an additional 4 weeks from this announcement to do so;
- Have traded in 2019-20; be currently trading at the point of application (or would be except for COVID 19) and intend to continue to trade in the tax year 2020 to 2021;
- Have trading profits of less than £50,000 and more than half of your total income come from self-employment. This can be with reference to at least one of the following conditions:
- Your trading profits and total income in 2018/19
- Your average trading profits and total income across up to the three years between 2016-17, 2017-18, and 2018-19.
How do I access it?
Individuals should not contact HMRC now. HMRC will use existing information to check potential eligibility and invite applications once the scheme is operational. HMRC will then pay the grant directly to eligible claimants’ bank account. HMRC is urgently working to deliver the scheme; grants are expected to start to be paid out by beginning of June 2020. For eligible individuals who have not submitted their returns for 2018-19, they will have 4 weeks’ notice from the date of the announcement to file their returns and therefore become eligible for this scheme.
When can I access it?
HMRC is urgently working to deliver the scheme; grants are expected to start to be paid by the beginning of June 2020. This time is necessary to ensure that the scheme is both deliverable and fair. In the interim the self-employed will still able eligible for other government support including more generous universal credit and business continuity loans.
Further information can be found on the government’s own business support portal, including scheme FAQs.
Deferral of self- assessment payment
The self-assessment payment on account, that is ordinarily due to be paid by 31 July 2020 may now be deferred until January 2021.
If you are self-employed, you are eligible for the deferment.
How to access the scheme
This is an automatic offer with no applications required. No penalties or interest for late payment will be charged if you defer payment of your July 2020 payment on account until January 2021.
HMRC have also scaled up their Time to Pay offer to all firms and individuals who are in temporary financial distress as a result of coronavirus and have outstanding tax liabilities.
On 31 July 2020 when your self-assessment payment on account, ordinarily due to be paid on that date, may be deferred until the 31 January 2021.
Tax Support – Time to Pay
All businesses and self-employed people in financial distress, and with outstanding tax liabilities, including foreign businesses with Head Quarters in the UK, may be eligible to receive support with their tax affairs through HMRC’s Time To Pay service.
These arrangements are agreed on a case-by-case basis and are tailored to individual circumstances and liabilities.
Who is eligible?
You are eligible if your business:
- pays tax to the UK government
- has outstanding tax liabilities.
You can contact HMRC’s new dedicated COVID-19 helpline for advice and support on 08000 241222.
Delay to implementation of reforms to IR35 affecting “off-payroll workers”
Reforms to off-payroll working rules have been delayed by 12 months as part of the government’s Covid-19 economic response package.
Reforms will now come in on 6 April 2021 as part of response to Covid-19 and part of a coordinated action by government to support businesses and individuals
Universal credit for every self employed person at a rate equivalent to Statutory Sick Pay – £94.25 per week
Those who are not eligible for SSP, for example the self-employed or people earning below the Lower Earnings Limit of £118 per week, can now more easily make a claim for Universal Credit or Contributory Employment and Support Allowance.
The government has suspended the minimum income floor for twelve months – meaning every self-employed person can now access, in full, Universal Credit at a rate that is equivalent to Statutory Sick Pay for employees.
People will be able to claim Universal Credit and access advance payments upfront without the current requirement to attend a jobcentre if they are advised to self-isolate.
Further details can be found on the government Universal Credit website.
Employment and support allowance
Self-employed people unable to work because they are directly affected by coronavirus (COVID-19) or self-isolating will also be eligible for contributory employment and support allowance. As announced at Budget, this is now payable from the first day of sickness, rather than the eighth.
More information can be found on GOV.UK.