At long last Chancellor Rishi Sunak unveiled measures for Self Employed earners affected by the coronavirus epidemic. As expected, this is broadly in line with the furlough scheme for those paid via PAYE.
The summary of the package is as follows:
- The new self-employment income support scheme will pay 80% of an individual’s average monthly profit over the last three years, up to a maximum of £2,500 a month. It will be open to all across the UK for a three month period, with an extension if necessary.
- Those who cannot produce three years of accounts will be able to submit either one or two years.
- It will only be on offer for those with “trading profits” of up to £50,000.
- Applicants for the scheme must have the majority of their income from self employment.
But the catch is the bail out makes it more likely that that national insurance contributions (NICs) will be aligned so that employees and the self-employed pay the same
- They must also have already submitted a tax return for 2019. Those who have not submitted a tax return will not be eligible.
- Late filers of the January tax return will have until 26 April 2020 in which to submit a return.
- Access to the scheme no later than the beginning of June, when the department will contact those eligible directly and ask them to fill in an online form. Payments will be made directly into their bank account, and will be back dated to 1 March, meaning a self employed taxpayer will receive three months’ money in one go.
The bail out now makes it more likely that national insurance contributions (NICs) will be aligned so that employees and the self-employed pay the same. We expect to hear more in the Autumn Budget no doubt.
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