Self-employed: Coronavirus aid from the Government

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First published: 26 March 2020
Last updated: 1 June 2020

The Self Employed Income Support Scheme is part of the Government’s support for self-employed people in financial difficulty due to the coronavirus crisis.

So far, 2.3 million people have made claims under this scheme, worth £6.8 billion in total (source: Gov.uk, 1 June 2020).

What is the Self Employed Income Support Scheme?
For how many months can you get a Self Employed Income Support grant?
Are you eligible for the Self Employed Income Support Scheme?
What do you need to do?
How can you tell if the message from HMRC is genuine?
When will you get the money?
If you’re struggling right now, what Government aid is available?
Can you still work if you get money from this Scheme?
Can you claim the second grant if you didn’t claim the first?
Is this aid the same as the aid for employed workers?
Why has this taken so long?

What is the Self Employed Income Support Scheme?

The Government will pay self-employed people who have been adversely affected by the coronavirus two taxable grants:

  • Grant for March, April and May 2020
    This grant is worth 80% of your average monthly profits for the last 3 years, capped at £7,500 in total.
  • Grant for June, July and August 2020
    This grant is worth 70% of your average monthly trading profits for the last 3 years, and capped at £6,570 in total.

For how many months can you get a Self Employed Income Support grant?

Eligible self-employed people can claim two grants – the first covers March, April and May 2020, the second covers June, July and August 2020.

You have until 13 July to claim the first grant.

Are you eligible for the Self Employed Income Support Scheme?

Check if you’re eligible

The fastest way to find out if you’re eligible is to use the checker on the HMRC website. You’ll need to have to hand:

  • your UTR
    (Self Assessment ‘Unique Taxpayer Reference’ number)
    This 10-digit number is on all your tax returns and any letters about Self Assessment. You can also find it by logging into the Government Gateway.
  • your National Insurance number
    This is also on any of your tax returns and on any payslips if you’ve been employed.

If you’re eligible, the checker will tell you how to apply.

Eligibility criteria

HMRC will have already contacted you (or you’ll hear from them soon) if you hit all these eligibility criteria:

  • you pay income tax in the UK
  • you’re already registered as a ‘self-employed’ individual or member of partnership
  • the majority of your income (over half) is from self-employment
  • you submitted a tax return for the tax year 2018 to 2019
  • your trading profits each year for the last 3 years were no more than £50,000

To be eligible for a grant from this Scheme, you’ll also need to confirm:

  • you traded in the tax year 2019 to 2020
    (‘trading’ means paid for your work, or buying / selling goods or services)
  • you’re trading when you apply or you would be if the coronavirus outbreak hadn’t happened
  • you’ve lost trading or partnership trading profits due to coronavirus
  • you intend to continue trading in the tax year 2020 to 2021

If you only started working as self-employed between 2016 and 2019, HMRC will work out your payments based on the years for which you filed a Self-Assessment tax return.

If you’re self-employed but haven’t yet filed a tax return – that is, you started your business after 1 April 2019 – you’re not eligible for this Scheme.

Sunak stated that this Scheme would help 95% of self-employed people in the UK. The Government want to make sure that this Scheme does not pay a grant to the extra 5% of self-employed people who are super-wealthy, for example top celebrities, sports professionals etc who do not need ‘aid’. Because their trading profits for each year will be over £50,000, they won’t be eligible.

What do you need to do?

If you meet the initial eligibility criteria (see above), HMRC will contact you directly. The online application service for the first grant is available from 13 May 2020.

You can use the HMRC checker to find out if you’re eligible and if you are, the website will tell you how to claim.

You’ll be asked to fill in a form and then they’ll pay the first grant directly into your bank account. You’ll get one instalment, to cover March, April and May. You have until 13 July 2020 to claim the first grant.

You’ll be able to apply for the second grant in August 2020. We don’t yet know the deadline for claiming the second grant.

How can you tell if the message from HMRC is genuine?

If someone emails, calls or messages you claiming they’re from HMRC and asks you to click a link or to give details (name, account number, credit card number etc), it’s a scam.

The genuine message you get from HMRC will ask you to go to the Gov.uk website.

You should always check carefully to make sure a message or call claiming to be from HMRC is genuine.

When will you get the money?

The Government says that if your claim is approved, you’ll get your grant within 6 working days.

If you’re struggling right now, what other Government aid is available?

The Government has acknowledged that many self-employed people need help now. Other aid schemes open to self-employed people include:

  • Bounce Back Loan Scheme
    Small businesses can borrow from £2,000 to £50,000, interest-free for a year and no repayments for the first 12 months.
  • Coronavirus Business Interruption Loan Scheme
    The Scheme provides finance for small businesses which have or will have their cash flow disrupted by lost or late income due to the coronavirus outbreak.
  • Deferred Self-Assessment tax payments
    Payments you were due to make by July 2020 can be deferred until the end of January 2021. You don’t need to apply and there’s no fee or interest for deferring.
  • HMRC Time To Pay Scheme
    For businesses and self-employed in financial distress, and owing money to HMRC. You might be eligible for support, for example a longer time to repay what you owe. 
  • Universal Credit
    To help during the coronavirus crisis, the Government have changed the eligibility criteria for Universal Credit so that “self-employed people can access this aid in full”.
  • Coronavirus Grants
    You might be eligible for a grant if you have a property on which you pay business rates.
  • Job Retention Scheme
    If you’re the director of your own company and you pay yourself through PAYE, you might be able to use this Scheme.

Can you still work if you get money from this Scheme?

Yes. The money you’ll get from this Scheme depends on your income from the last three years, not any income you’re making now. So you can continue to work, take on new work, take payments and so on.

Can you claim the second grant if you didn’t claim the first?

Yes. You don’t need to have claimed the grant for March, April and May to get the grant for June, July and August.

This is because, for example, you might have only been negatively affected by coronavirus in these later months.

Is this aid the same as the aid for employed workers?

The Chancellor claims that this Scheme is the same as the money being provided to allow employers to ‘furlough’ their workers under the Job Retention Scheme: that is, 80% of monthly income. He stated this is above what many other government are paying, making it one of the most generous in the world.

Why has this taken so long?

Because as well as deciding what to offer, it wasn’t straightforward to set out who is eligible.

Addressing MPs on 25 March, Boris Johnson acknowledged it had been difficult to decide how to organise a scheme to support people who pay tax through Self-Assessment rather than the PAYE (Pay As You Earn) scheme for employees.

Johnson stated that the Government wanted to do “whatever we can to support the self-employed, just as we are putting our arms around every single employed person in this country”.

Have your say

How is the coronavirus affecting you and your small business? We’re keen to hear from you – get in touch with us on LinkedInFacebook or Twitter.

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Photo by Carl Barcelo on Unsplash

Suzanne Worthington

Senior Writer

Tide Team

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