Covid-19 Chancellor announces package to help the self-employed through coronavirus crisis

After the announcement of a package of measures last week to help businesses and employers through the coronavirus crisis, he has now turned his attention to helping the self-employed. This was, as expected, a much more difficult package to put together and although it has some similarities to the coronavirus job retention scheme published last week, there are a number of differences. HMRC has published a press release and also preliminary guidance.

The headlines are

  • The support will be 80% of monthly profits, averaged over three years 2016/17, 2017/18 and 2018/19
  • It will be capped at £2,500 per month for three months (ie, up to £7,500 in total), but this may be extended
  • It is only available if average annual taxable earnings are below £50,000
  • The majority of income has to be from self-employment
  • Unlike furloughed employees, the individual can continue to operate the business
  • Those who started self-employment after 5 April 2019 are excluded
  • HMRC will contact those eligible
  • HMRC is allowing those who have yet to file their tax return for 2018/19, which was due on 31 January 2020, an additional four weeks to file and get up to date
  • The scheme will be available from the beginning of June 2020, effectively back-dated three months to 1 March 2020, and paid in one lump sum.

We will provide a more detailed briefing this after further reflection. The Chancellor also said that the Government intends to start a discussion on the different tax treatment of the employed and the self-employed, something we have highlighted in the past.