The Coronavirus Self-employed Income Support Scheme

Friday 27 March 2020

Following the announcement that employers can receive help from the government through the Coronavirus Job Retention Scheme, ministers were criticised for the lack of help that was being provided to Britain’s 5 million self-employed workers.

Last night Chancellor, Rishi Sunak, announced measures to support self-employed people who have suffered a loss of income as a result of the coronavirus pandemic.

Who is eligible?

The Coronavirus Self-employed Income Support Scheme (the Scheme) is open to those who were trading in the last financial year, are still trading now and who plan to continue doing so this year.

To be eligible, more than half of the claimant’s income must come from self-employment. The scheme will be open to those with a trading profit of less than £50,000 in 2018-19, or an average trading profit of less than £50,000 from 2016 onwards.

Those who are recently self-employed and do not have a full year’s accounts will not receive any help under the Scheme. The government’s latest measures are on top of a six-month delay for tax payments through the self-assessment system.

Those on the lowest incomes are in line to receive more generous benefits payments, which were announced previously. The Chancellor said those applying for Universal Credit should be paid within a few days.

What help will they get?

The Scheme will allow the self-employed to claim a taxable grant which is worth 80% of their trading profits (up to a maximum of £2,500 per month) for the next 3 months. This will be paid in single lump-sum at the beginning of June.

This is unlikely to help with immediate cash-flow issues but the self-employed may be able to access the Coronavirus Business Interruption Loan Scheme.

Those eligible for the scheme will be contacted by HMRC and will be invited to apply online.

The Chancellor has said that this will cover 95% of the self-employed who derive most of their income from their self-employment. Those who pay themselves a salary and dividends through their own company are not covered by the Scheme but will have 80% of their salary covered by the Coronavirus Job Retention Scheme if they are operating through PAYE.

If you have any further questions about the Coronavirus Self-employed Income Support Scheme, please email or call our Employment Law team today on 0113 207 0000.