d&t's James Thomas explains what the government support for the self employed means in plain English
The pandemic has touched the lives of everyone and every business across the world in some way. From needing to work from home, furloughing staff to some having to shut shop altogether the effects are widespread. Some are agile enough to have been able to adapt their business model to carry on in these uncertain times. Some have not been so fortunate. The government has stepped in and announced various support packages for UK business and most recently support for the self-employed. There are a number of rules and caveats so our experts at d&t have summarised the support on offer in plain English.
The government has introduced the Self-employment Income Support Scheme (SEISS) to support self-employed individuals, including members of partnerships. This is very welcome news for most of the self-employed but high earners, over £50,000 and the newly self-employed, since April 2019 will be left empty-handed.
Anyone with average self-employed income over the past three tax years to 5th April 2019 of less than £50,000 can claim. This also needs to be your main income and you must have been self-employed in 2018/19.
You will get a taxable grant which will be 80 per cent of your average taxable profits for the past three years, up to a maximum of £2,500 per month for three months. Here’s a working example:
2016/17 - £20,000
2017/18 - £25,000
2018/19 - £30,000
Average £25,000 x 80% = £20,000.
Monthly award: £20,000/12 = £1,667
HMRC have advised that they will contact everyone who is eligible for the scheme and will invite them to apply online. No action can be taken until the application scheme is published. The grant will be paid as a lump sum, but it is not expected to be paid until June.
While you are waiting for the payment or if you are not eligible you should be able to receive funding through the Coronavirus Business Interruption Loan Scheme. Please speak to your bank and they should be able to arrange an interest-free loan or overdraft to help you through the next few months.
The situation we all face is unprecedented, and at d&t we want to help as many businesses as possible navigate their way through these difficult times for the best possible outcome. For further details about the SEISS Scheme and other support available, we have set up a dedicated portal to provide the latest information outlining what is being offered to businesses following the outbreak of COVID-19. Designed as a free resource, the new area of the d&t website brings together information on the latest announcements affecting businesses, FAQs, checklists and relevant documentation available for download.
James Thomas is commercial manager at d&t, an award winning chartered accountancy and business advisory specialist.