Help for the self-employed
Following the Prime Minister’s announcement of a second lockdown in England starting on 5 November and due to last until at least 2 December, the Chancellor has revealed an extension to the Self-Employed Income Support Scheme Grant.
The original scheme introduced in May this year described how the Government would make a grant to self-employed workers based on their previous earnings over the last 3 years, worth up to 80% of earnings and capped at £2,500 per month.
Who is eligible?
To be eligible you needed to have annual profits (business income minus business expenses) of less than £50,000 per year. Worker’s Self-Assessment Tax Returns were the key evidence on which the calculation would be based.
The scheme continued throughout the summer and into the autumn but with reducing benefits. The newly announced ‘Grant Extension’ enhances these payments.
Eligibility for this ‘Grant Extension’ is that the claimant:
- must have been eligible for the Self-Employment Income Support Scheme first and second grants earlier this year, although they don’t have to have claimed them;
- either intends to continue trading but is suffering reduced demand for their services due to the coronavirus, or;
- was previously trading but was temporarily unable to do so due to the coronavirus
How long will the grant be available for?
The taxable grant originally intended to be paid for a 3- month period from 1 November 2020 to 3 January 2021 has been increased to 80% of average monthly trading profits, paid out in a single instalment covering 3 -months’ worth of profits and capped at £7,000 in total.
A second grant covering a 3- month period from 1 February to 30 April 2021 is likely to be payable but its’ level will be reviewed in due course.
HMRC have indicated that the online service used for claims for the first grant is being updated and will be available from 30 November 2020.
The Coronavirus business support finder tool
This tool, available here on the GOV.UK website has recently been updated and shows the range of government support available to businesses.
There is much useful information and guidance which small businesses and self-employed persons, including CIS contractors, may want to check out including:
- Deferring your Self-Assessment payment on account;
- Time to Pay tax arrangements
- ‘Bounce Back’ loans
- Coronavirus Job Retention Scheme