The government recently announced that self-employed workers can apply for a support scheme worth 80% of their average monthly profits.
The aid has been put in place following increased pressure after the previously announced job retention scheme was put in place a week earlier that supports employers and their workforce.
The Chancellor, Rishi Sunak stressed to the self-employed, “you have not been forgotten.”
The self-employed support scheme will provide workers up to a maximum of £2,500 a month and will be paid in a single lump sum, but this aid will most likely not be in place until June at the earliest.
Details on the package
This support is available to workers who earn under £50,000 a year which covers around 3.8 million out of the 5 million registered as self-employed.
Sunak stated that the grant will be calculated based on their average monthly profits over the last three years and half their income must come from self-employment as registered on the 2018-2019 tax return filed in January.
As an added measure to ensure nobody misses out on this scheme, the government has also extended the deadline for the tax return by an additional four weeks.
While support is predicted to arrive in June, the funds will be backdated to March and in this time, the self-employed can continue to work, unlike the job retention scheme.
A few key points to state:
- The grant will be taxable and will need to be declared on tax returns by January 2022
- Business owners who pay themselves a dividend aren’t covered
- The scheme does not cover those who very recently became self-employed and the chancellor advises them to look at the available benefit system for support
Sunak added that creating the scheme has been ‘difficult’ as the self-employed were a ‘diverse population’, but the plan is ‘fair, targeted and deliverable’.
Faisal Islam, Economics Editor for the BBC commented on the scheme, “The Coronavirus Self-Employment Income Support scheme is another extraordinary, multi-billion pound support, reflecting the brutal economic impact of a shutdown designed to keep the pandemic in check.”
How can KashFlow help?
KashFlow can help you prepare and submit your self-assessment to HMRC with our small business bookkeeping software.
It’s built for the self-employed and small businesses, so it’s jargon-free, meaning you don’t need to be an accountant to use it.
With tons of extra features including cash flow reporting, invoices and taking card payments, KashFlow can provide you with added certainty in uncertain times.