So here it is: the government’s belated and still somewhat muddled pledge to help the nation’s millions of self-employed, including no small number of IT contractors.
“Don’t call us, we’ll call you”, the government said to applicants, who are being promised a cash grant worth 80 percent of their average monthly trading profit over the last three years. There was no new clarity for those who have been trading for less than this time, other than a suggestion to claim Universal Benefit.
There was also no new clarity on the eligibility of the self-employed trading as one-person limited liability companies, who may find themselves left out.
Support for Self-Employed: Limited Detail, Fears Abound
HMRC will use the average trading profits “from tax returns in 2016-17, 2017-18 and 2018-19” to determine the size of the grant and share more details “shortly.”
“HMRC will use existing information to check potential eligibility and invite applications once the scheme is operational,” the government said.
“Those who pay themselves a salary and dividends through their own company are not covered by the scheme but will be covered for their salary by the Coronavirus Job Retention Scheme if they are operating PAYE schemes.”
Chancellor @RishiSunak announces a package of measures to support the self-employed, and says he is grateful to FSB for the conversations that have helped to achieve this.
We welcome these measures to further support the self-employed through COVID-19 #ThinkSelfEmployed pic.twitter.com/i5Q6tQLp0E
— FSB (@fsb_policy) March 26, 2020
The scheme has been designed after “extensive engagement” with stakeholders including the TUC, the Federation of Small Businesses and IPSE – The Association of Independent Professionals and the Self-Employed it said.
The government added: “Self-employed individuals are already benefitting from a series of measures announced by the Chancellor to boost household incomes and will be able to access these while the new scheme is being rolled out.
“These include a strengthening of the welfare safety-net with a £7 billion boost to Universal Credit, income tax and VAT deferrals, £1 billion more support for renters and access to three-month mortgage holidays.
More to follow