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Forum Home  →  Discussion  →  COVID-19: Employment schemes  →  Thread

Support package for the self-employed

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shawn mach
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Announcement expected tomorrow:

The chancellor, Rishi Sunak, is expected to announce that the taxpayer will pay self-employed workers up to 80% of their recent earnings ...

... Details of the support package were still being finalised last night, but sources with knowledge of the plan suggested it would echo the promise of covering 80% of recent earnings that Sunak made to employees last week.

It could be subject to a lower cap than the £2,500 in monthly pre-tax income available in that scheme, however – because the self-employed tend to pay less tax. Some groups, including those already claiming universal credit, could be excluded.

More: https://www.theguardian.com/world/2020/mar/25/uk-government-set-to-pay-self-employed-workers-80-of-earnings

SallyA
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“Some groups, including those already claiming universal credit, could be excluded.”

Will be interesting to see if that includes the ones who made new claims in the past few days.

shawn mach
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According to a preview in today’s Times, the scheme being announced today is likely to be targeted at those who earn less than £50,000 a year:

Officials have discussed plans which will mean people’s income being assessed on the basis of a “blended” mixture of their revenues and profits over the past three years. They would then be paid a significant proportion of their usual income up to a capped amount, which some in industry have suggested should be £1,700 a month.

The scheme will be designed to ensure that wealthier people who are self-employed such as lawyers and TV presenters are not able to take advantage. There are an estimated 5 million self-employed workers in the UK, but not all will have been directly affected by the outbreak. The bailout is expected to be means-tested, with discussions that those earning over £50,000 a year should not be able to benefit.

The scheme will be administered by HM Revenue & Customs, which will set up a website to ask people for their bank details. They will not be expected to provide proof that their incomes have been reduced by the coronavirus outbreak. It is likely to be ready by the end of April.

But the Sun has had a different steer:

An eligibility cap is expected to be set at around the median income level – £30,353 last year – meaning it will include cleaners, childminders and cab drivers but not high-earning professions like lawyers or tech programmers.

One likely option being studied last night is to use January’s tax return for the financial year 2018-19 as the new scheme’s benchmark.

Source: The Guardian live blog

shawn mach
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Chancellor just announced:

- new self-employed income support scheme;
- a taxable grant of 80% of average monthly profit over the last 3 years, up to £2,500 a month;
- will last for 3 months in the first instance;
- available for all those with a trading profit of up to £50,000;
- majority of income needs to be from self-employment;
- need to be already in self-employment with a tax return for 2019;
- available from the beginning of June 2020;
- can continue to do business while claiming ...
- anyone who missed the filing deadline in January now has 4 weeks to submit their tax return

However also says that it’s now much harder to justify the inconsistent contribution between people with different employment statuses, and that if we all want to benefit equally from state support, we all need to pay into the system equally in the future ...

NB - also says that detailed guidance will be published this evening on the Coronavirus Job Retention Scheme ...

shawn mach
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Govt press release on the new self-employed income support scheme now available:

https://gov.uk/government/news/chancellor-gives-support-to-millions-of-self-employed-individuals

shawn mach
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TF
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Universal Credit team - Your Homes Newcastle

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Has there been anything released on how these grants will affect UC assessment periods?

Sean
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TF - 27 March 2020 08:53 AM

Has there been anything released on how these grants will affect UC assessment periods?

Just been speaking to my colleagues about this.

There’s the assumption being made that it will only impact the assessment period within which the payment falls and doesn’t fall foul of Regulation 60, UC Regulations 2013. Further assumption that it will work similarly to statutory sick pay i.e. counts as income as it replaces lost earnings.

As SallyA pointed out though, there is the suggestion that those on UC may not be able to claim the self-employed support package. Although, I haven’t seen anything definitive on this point.

Madamejones
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TF - 27 March 2020 08:53 AM

Has there been anything released on how these grants will affect UC assessment periods?

my first thought when I heard the scheme details last night. i.e if a family need to claim UC now and then that grant hits the bank account in June…..BUT I suppose it is right that it is counted as income for that month only as other wise they would be ‘benefiting’ twice.

Claimants just need to be aware of this, and they won’t!

dizzymare
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SallyA - 26 March 2020 11:27 AM

“Some groups, including those already claiming universal credit, could be excluded.”

Will be interesting to see if that includes the ones who made new claims in the past few days.

there doesnt seem to be anything to say (as yet) that those already on UC cant claim the grant? have I missed anything (though we all know detail is a bit thin on the ground at the moment)

Im just a bit wary of advising people to claim if it means that they may miss out (though in reality many people wont have any other option and will have to claim if this grant isnt likely to come through for several months)

 

biscuits
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The notes at bottom of the press release say:

“before grant payments are made, the self-employed will still be able to access other available government support for those affected by coronavirus including more generous universal credit and business continuity loans where they have a business bank account”

https://www.gov.uk/government/news/chancellor-gives-support-to-millions-of-self-employed-individuals

Will people be able to stay on tax credits until June though if they can afford it?

Chrissum
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Early days yet, I know and it’s probably my not reading things fully, but does anyone know whether CIS registered sub-contractors will be covered by this scheme? They have always been a grey area when it comes to employment rights and I know they do submit some form of tax return but their contractor also makes payments / deductions on their behalf. My employment knowledge is a bit rusty now but I just wondered how “self-employment” will be defined - by employment law, tax law or benefit law?
Many thanks.

Ruth Knox
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I can’t see any mention of a requirement that you have had to be self-employed for three years in the legislation, although there was somewhere a suggestion that your average earnings would be calculated over a three year period. However, I note that the Guardian report suggests that those who have been self-employed for less than three years will be excluded.  Does anyone think there is a danger of this?

Ianb
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There is nothing in the guidance that requires a three year history. Indeed it expressly states that if they have less than a three year history the grant will be based on the years the claimant has been trading.

https://www.gov.uk/guidance/claim-a-grant-through-the-coronavirus-covid-19-self-employment-income-support-scheme#how-much-youll-get

“You’ll get a taxable grant which will be 80% of the average profits from the tax years (where applicable):

2016 to 2017
2017 to 2018
2018 to 2019
To work out the average HMRC will add together the total trading profit for the 3 tax years (where applicable) then divide by 3 (where applicable), and use this to calculate a monthly amount.

If you started trading between 2016-19, HMRC will only use those years for which you filed a Self-Assessment tax return.”

[ Edited: 29 Mar 2020 at 05:49 pm by Ianb ]
Ruth Knox
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That’s good news - thanks

JoW
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If people get it in June is it backdated to March ( iie in June they get a lump sum for the preceding 3 months) or a monthly amount from June for 3 months?