Reaction to Covid-19 self-employed provision – Rosy Hughes, Head of Private Client Tax
On Thursday evening Chancellor Rishi Sunak stepped up to the podium again for another announcement – this time tasked with providing support to the self-employed.
- The provision of financial support for the self-employed population is without a doubt a complex issue, but it is wholly necessary.
To ask the self-employed to rely on access to universal credit or other means of support wasn’t necessarily going to give a fair result, for example a self-employed person with very little income may not get anything through existing benefit channels like Universal Credit.
Their partner may be supported through the Coronavirus Job Retention Scheme, but that household may be relying on the self-employed income to pay the bills.
Unfortunately, some people are bound to fall through the cracks! An upper limit to the funding on offer is necessary, just as it is for furloughing. It is better and fairer that more people get something, rather than nothing at all.
- The announcement revealed self-employed individuals will get a taxable grant up to 80 per cent of average monthly profits which is benchmarked over the last three years. This could be up to £2,500 a month for at least three months.
The grant is only available for people who earn up to £50,000 in trading profits. The measure is targeted at lower earning self-employed individuals who do not have significant other sources of income.
For those self-employed who are currently in self-isolation due to having the virus or living with someone who does, they can print off a self-isolation form and use this to claim the limited Employment Support Allowance (this does not depend on household income, only their national insurance record) – it is not much but it is something.
- HMRC will contact individuals directly and the funding will be paid directly into the self-employed bank account, but unfortunately they have indicated this won’t be possible until the beginning of June.
They will try to do it faster I’m sure, but it is a vastly complicated task that is being completed alongside a raft of other new schemes and changes.
Until the system is working people can benefit from the Business Interruption Loans, the payment on account deferral and can claim universal credit in full – but as mentioned above this doesn’t always work if you have someone else who works in the family!
The team here at Burgis & Bullock is here to support you with any questions you have regarding the funding that you are able to access as a self-employed individual.