Scouting the best contractor services for you

Latest News

Self-Employed Not Forgotten in Coronavirus Crisis

Self-Employed Not Forgotten in Coronavirus Crisis

Following accusations that the self-employed were being left out in the cold during the Covid-19 epidemic, the government has responded with new measures to protect this sector. On March 26th, the Chancellor announced news of the Self-Employed Income Support Scheme, which see the relief on offer to the self-employed achieve parity with that offered to employees under the Coronavirus Job Retention Scheme.

The scheme will mean that self-employed workers can apply for a cash grant worth up to 80 percent of their average monthly trading profits over the last three years. Those eligible will receive up to £2,500 per month in grants for at least 3 months.

Announcing the scheme, the Chancellor Rishi Sunak said: “Self-employed people are a crucial part of the UK’s workforce who’ve understandably been looking for reassurance and support during this national emergency. The package for the self-employed I’ve outlined today is one of the most generous in the world that has been announced so far.”

HMRC are asking people not to contact them as the scheme is under development and won’t be operational until June. HMRC will contact those eligible directly and ask them to fill out an online form. The money will then be paid directly into their bank account. Crucially, anyone who missed the deadline in January, has four weeks from the announcement (March 26th) to submit their tax return. The main points of the scheme are summarised below:

  • At least half your income needs to have come from self-employment as registered on the 2018-19 tax return filed in January
  • The scheme is open to those who earn under £50,000 a year
  • Unlike the employee scheme, the self-employed can continue to work as they receive support
  • The money, backdated to March, will arrive directly into people’s banks accounts from HMRC, but not until June
  • The grants will be taxable, and will need to be declared on tax returns by January 2022
  • Company owners who pay themselves a dividend are not covered but may be covered for their salary by the Coronavirus Job Retention Scheme, providing they are operating via PAYE.

It’s thought that the scheme will cover up to 3.8 million of the 5 million people registered as self-employed in the UK. The Federation of Small Business, which represents many self-employed workers, welcomed news of the scheme, saying: “Although the deal is not perfect, the government has moved a very long way today.”

The scheme doesn’t cover those who only became self-employed very recently, who will need to look to the benefits system for support. Banks will need to be relied on to support many of the self-employed with overdrafts to tide them over until the grant goes into their bank accounts in around 10 weeks’ time.

In the meantime, contractors may also be eligible for further relief under the many new measures that have been brought in to help workers and businesses deal will the financial fallout from the crisis. Details of these can be found on the government website and include:

Contracting Scout has a range of options to help you with your contracting career. To talk to a member of our team, call: 0203 603 1878