Today the Chancellor of the Exchequer announced a package of support for self-employed people and freelancers. There’s some good news for most self-employed people, though not all.
The government has now published the guidance. Below is a summary of the main features.
Who is entitled to help?
Anyone who is already self-employed, earns the majority of their income through self-employment and has taxable profits of less than £50,000 on average per year should be eligible. There are still some questions to be answered about how flexible the government will be about length of self-employment.
What about people on zero hours contracts or agency workers?
They are covered by the employees scheme – the government guidance on this has just been announced and is here. The Agency or usual employer should claim for them if they have to be furloughed (that is, keep their jobs but not have any work to do for the time being because of the Covid-19 rules). This rate should be based on the higher of either the same month’s earning from the previous year or average monthly earnings from the 2019-20 tax year.
What new help was announced today?
A lump sum to cover three months of the average monthly income pro-rata, based on the last three years’ declarable taxable profits, up to a maximum of £2,500.
When will this be paid?
It will be paid in June, backdated to cover March, April and May.
What can I do till then?
- There is other help for self-employed people.
- You can apply for a Business Interruption Loan.
- Check if you are eligible to apply for Universal Credit – the rules on minimum incomes have been removed and you may be entitled to ask for an advance payment.
- Any tax owing can be deferred until next January.