Covid-19 Self Employment Income Support Scheme

27th March 2020

Covid-19 Self Employment Income Support Scheme

Share this article

There are around five million self-employed workers in the UK who did not benefit from the Coronavirus Job Retention Scheme. In less than a week after the Job Retention Scheme was announced, the government has put a package together to support the self-employed, after much lobbying on their behalf.

According to the HMRC web-site, the Covid-19 Self Employment Income Support Scheme will allow the self-employed to claim a taxable grant worth 80% of their trading profits up to a maximum of £2,500 per month for the next three months. This may be extended if needed.

What little detail there is on the scheme can be found here:

The scheme is not running yet, and the announcement confirmed that the payments would not be made until June.

Whilst the scheme will be welcomed by many self-employed, there is still a minority who will not be entitled to any support through this channel:

  • People who haven’t traded long enough to have filled a self-assessment return last year
  • People who have made more than £50,000 profit
  • People who operate through a limited company.

Another issue with the scheme is that the payment is linked to trading profits. For past self-assessment, many self-employed have attempted to reduce their trading profits to pay as little tax as possible. 80% of the trading profits may not go far enough to provide a replacement income.

For those self-employed in name only, it may be tempting to seek to requalify their contract into a contract of employment to benefit from a better protection. This is where we can help.

If you are self-employed, please talk to your accountant in the first instance to discuss your situation and whether this scheme will be of practical help.

This note does not constitute legal advice on any particular situation you may have.

Share this article

Related Articles

New furlough scheme announced

30th May 2020

The UK government had announced the extension and changes to the Coronavirus Jobs Retention Scheme (CJRS) to October 2020 on 12 May 2020. There was a lot of speculation that businesses would be expected to contribute 20% of the costs of the furlough scheme from 1 August 2020. The government has now provided details on how businesses […]

Furlough: Is Europe leaving Britain behind?

21st May 2020

UPDATE 29/05/2020 : PART TIME FURLOUGH WILL BE INTRODUCED FROM JULY 2020 NOT AUGUST 2020 AS PREVIOUSLY ANNOUNCED WE HAVE UPDATED THIS BLOG ACCORDINGLY. The UK government has announced the extension of the Coronavirus Jobs Retention Scheme (CJRS) to October 2020.  As part of this announcement, the Chancellor, Rishi Sunak, also announced that from July employers would […]

Can I ask my staff to take holiday during furlough?

11th May 2020

Update 14/05/2020: the government has published guidance confirming the advice below: https://www.gov.uk/guidance/holiday-entitlement-and-pay-during-coronavirus-covid-19#taking-holiday. By now, we assume that the majority of employers who are going to use the Coronavirus Job Retention Scheme (CJRS) have done so. According to news reports almost 25% of employees are now on furlough. We have kept an eye on the directions […]