The Chancellor announced on Thursday a new package of support for the self-employed. What we know so far:
- The new scheme will offer a taxable grant worth 80% of average trading profits, capped at a maximum of £2,500 per month for the next three months.The income will be calculated by looking at an average income over the last three years.#
- Claimants can still continue to work even when claiming the grant.
- The scheme only applies to those with trading profits up to £50k.
- To qualify, claimants will:
- have had to have submitted a tax return for 2019
- are trading upon application, or would be except for COVID-19
- intend to trade in the tax year 2021
- have lost trading / partnership trading profits due to COVID-19.
- Self-employed trading profits must also be less than £50,000 and more than half of the income is from self-employment.
- This is determined by at least one of the following conditions being true:
- having trading profits/partnership trading profits in 2018-19 of less than £50,000 and these profits constitute more than half of total taxable income
- having average trading profits in 2016-17, 2017-18, and 2018-19 of less than £50,000 and these profits constitute more than half of average taxable income in the same period
- The scheme is unlikely to be ready until June.
- The money will be paid in a single lump sum.
What this means for businesses employing freelancers:
- The freelancer / contractor will still be able to work, but will be able to claim support for any other loss of earnings from other clients, for example.
- You do not need to do anything as HMRC will contact the self-employed person directly and assess whether they can claim the grant.
- Be aware and sympathetic that your freelancers may still have cash flow issues if the grant is not available until June at the earliest.
- HMRC has warned self-employed workers to be aware of scam emails, texts and calls. They advise if someone gets in touch claiming to be from HMRC, saying that financial help can be claimed or that a tax refund is owed, and asks you to click on a link or to give information such as your name, credit card or bank details, please do not respond.
For more guidance get in touch with our team at firstname.lastname@example.org or call 01483 378702. Information correct as of 27 March.