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Support for the self-employed during the coronavirus pandemic

27th March 2020

Following previous announcements on the support available to businesses in the wake of the COVID-19 global pandemic, chancellor Rishi Sunak yesterday announced a package of financial support for self-employed people impacted by coronavirus.

coronavirus support for the self-employed

What financial support is available to self-employed people?

The Government has confirmed that self-employed traders, freelancers and partners in partnerships impacted by coronavirus can claim 80% of their usual monthly profits, up to a maximum of £2,500 per calendar month to be paid in the form of a grant.

These measures are similar to the ones previously announced for salaried workers, however it is not available to all traders and a longer period of averaging is being used to calculate the amount people will be entitled to.

Earnings will be calculated based on the average business profits reported on tax returns for 2016-17, 2017-18 and 2018-19. Earnings for businesses which started during this period will be based on average profits since inception.

As with similar measures already announced, this will initially be for a three month period, however this may be extended if necessary.

The grants will be paid to traders in one lump sum directly into their bank accounts and will be backdated to cover the eligible period. It’s important to note that payments will not be made until June 2020, however people may qualify for further support, including the Business Interruption Loan and Universal Credit, in the interim.

Who is eligible to receive coronavirus support?

In order to benefit from the scheme an individual must meet the following conditions:

  • Profits reported on 2018-19 SATR of less than £50,000
  • Trading profits constitute at least half of all taxable income reported in 2018-19
  • Average profits for 2016-17, 2017-18 and 2018-19 must be less than £50,000 and at least half of taxable income
  • Must have continued to trade during the 2019-20 tax year
  • Must intend to continue to trade into the 2020-21 tax year
  • Would have been trading at time of claim, but for coronavirus outbreak
  • The grant will count as taxable income at the point it is received and must be reported on the 2020-21 SATR. It will also count as income for Tax Credits purposes
  • If you have not already done so, you must submit your 2018/19 SATR by 23 April to qualify

Traders do not need to contact HMRC to apply for the grant, instead HMRC will identify eligible individuals based on the information submitted in their 2018-19 tax returns and make contact ahead of June 2020.

Further support available to businesses impacted by coronavirus

Information correct at time of publication, 27 March 2020.

All information published is for general consumption and should not constitute financial advice.  All coronavirus updates are being written and distributed as timely as possible for the convenience of our audiences and will be monitored regularly for any updates and/or corrections.  Individual circumstances will vary and professional advice should always be sought on all matters before action is taken.

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