Self Employed measures introduced
Chancellor Rishi Sunak has just announced a new self-employed income support scheme, which will cover up to 80% of self-employed workers’ average taxable monthly profits.
The monthly profits will be judged on average profits over the past three years, and monthly payments will be capped at £2,500.
There are over 5 million self-employed workers in the UK, many of whom would have been among the first to feel the effects of closures and restrictions caused by the coronavirus outbreak.
The Chancellor says that the measures he’s introduced will benefit 95% of self-employed workers – but not everyone will be eligible. The rules and conditions are:
- You must: not earn average trading profits of more than £50,000 per year
- earn the majority of your income through self-employment
- have filed a tax return for the 2018-19 tax year – anyone who missed the 31 January deadline has four weeks from 26 March to file their 2018-19 return and benefit from the scheme.
The scheme will be run through HMRC – but it’s yet unclear when it will be available. The Chancellor said it will begin ‘no later than the beginning of June’ and will run for three months or for however long it is needed.
So if it is brought into force in June, workers will be backdated to March – so the payment would be given all in one go. HMRC will identify and contact self-employed workers that qualify for the scheme, inviting them to enter their bank details online. The government payment will then go directly into workers’ bank accounts.
What if you don’t have three years’ self-assessment history? For any self-employed workers that don’t have three years’ of self-assessment history, averages will be taken from whatever history is available – be it one year or two years.
Regrettably, for those who don’t have a year’s self-assessment history, the Chancellor said there is little the scheme can do to help you in these circumstances, due to the fraud risk.
If you have any questions on the above, please do not hesitate to get in contact with us.
We are on hand to help, and if you have yet to file your Tax Return for the year ended 5th April 2019 and need urgent help to get this filed, we can help with the compliance.
