An unprecedented level of government support for the self-employed has been announced, but there is a catch…
- Under the SEISS, self-employed people who make profits of up to £50,000 a year will be entitled to a taxable grant worth up to 80% of their monthly wages, capped at £2,500 a month.
- The scheme is only open to people who submitted a 2018-19 self-assessment tax return (or who do so before 23 April 2020) and traded in the 2019-20 tax year.
- Applicants must either be continuing to trade or would be but for the pandemic. They must have lost profits as a result of the virus, but intend to continue to trade in the 2020-21 tax year.
- For those with multiple income streams, more than half of their income must come from self-employment or they will not be eligible.
- Monthly wages will be calculated using an average over the past three years.
- HMRC will contact those who are eligible and invite them to apply online.
- The SEISS will cover losses over the next three months but it is unlikely to be up and running until June 2020.
- The SEISS is not open to those who operate through personal service companies. Instead, support for them is available through the Coronavirus Job Retention Scheme (CJRS).
The catch
- The Chancellor has suggested that he will raise national insurance contributions for the self-employed once the pandemic is over. The rationale behind this is that it will be harder to justify their special tax treatment after the SEISS pays out.
We have a dedicated Covid-19 team of employment lawyers keeping up to date on the latest developments and who are available to answer any questions you may have. You can find more information here.