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26 March, 2020 Open access

Chancellor announces new self-employment income support scheme for those affected by the coronavirus outbreak

Taxable HMRC grant will provide support at 80 per cent of average monthly profits over the last 3 years, up to £2,500 a month

The Chancellor Rishi Sunak has announced a new self-employment income support scheme for those affected by the coronavirus (COVID-19) outbreak.

With details of the Coronavirus Job Retention Scheme for employed people having been set out last week, and following calls for a package of support to also be made available for the self-employed, the Chancellor said this evening that –

'We know that people are worrying about their jobs and their incomes ... we have put together a coherent, co-ordinated and comprehensive economic plan that’s already making a difference …

… but I know that many self-employed people are deeply anxious about the support available for them … to you I say this: You have not been forgotten. We will not leave you behind. We all stand together.'

Confirming that a new self-employment income support scheme will be available from the beginning of June 2020, the Chancellor said that the scheme will provide people with a taxable HMRC grant of 80 per cent of their average monthly profit over the last 3 years, up to £2,500 a month.

NB – the scheme will cover the three months to May, with grants being paid in a single lump-sum instalment covering all 3 months.

Key features of the new scheme will include that it will be available to those with a trading profit of up to £50,000 in 2018/2019 (or an average of less then £50,000 between 2016/2017 and 2018/2019); where the majority of their income comes from self-employment; and where they were already in self-employment with a tax return for 2019.

The scheme will last for 3 months in the first instance, and people can continue to do business while claiming. In addition, anyone who missed the filing deadline in January 2020 now has 4 weeks to submit their tax return.

NB – the Chancellor added however that -

'I must be honest and point out that in devising this scheme ... it is now much harder to justify the inconsistent contributions between people of different employment statuses. If we all want to benefit equally from state support, we must all pay in equally in future.'

For more information see Chancellor gives support to millions of self-employed individuals from gov.uk