Self-employment Income Support Scheme

The Government has today announced a new Self-employment Income Support Scheme, which will provide self-employed people facing financial difficulties with 80% of their average monthly income, up to a maximum of £2,500. This will be calculated using their average monthly profits over last three financial years.

The scheme will initially last for three months, offering the same level of support for furloughed workers.

To be eligible, recipients must:

  • Already be self-employed
  • Have a self-assessment tax return for 2019 (a four week extension from today will enable people to submit a tax return if they missed the deadline)
  • Have trading profits of up to £50,000
  • Make the majority of their income from self-employment

HMRC are administering the scheme and aim for it to be live by June. Eligible recipients will be contacted directly and money paid directly into their bank account following application.

The scheme is in addition to of all of the self-employed support measures already announced below, including access to Universal Credit, Coronavirus Business Support loans and HMRC support outlined on the Gov.uk website. 

We will share more information through our Invest Plymouth channels as soon as receive more details.

What’s been announced for the self-employed:

  • The Government is deferring income tax self-assessment payments due in July 2020 to January 2021. This is an automatic offer with no applications required.
  • The Government is supporting people through the welfare system so that nobody is penalised for doing the right thing. Those on contributory ESA will be able to claim from day 1, instead of day 8. And the Government is relaxing the requirement for anyone to physically attend a jobcentre – everything can be done by phone or online. 
  • The Government is increasing Universal Credit and Working Tax Credit by £1,000 a year – a cash injection of nearly £7 billion in the welfare system. The Universal Credit standard allowance is being increased for the next 12 months, by £1,000 a year. Working Tax Credit will also increase by the same amount for a year.
  • The minimum income floor is suspended for twelve months. That means self-employed people can now access, in full, Universal Credit at a rate that is equivalent to Statutory Sick Pay for employees.
  • A three month mortgage holiday has been introduced for those in difficulty due to coronavirus. So that people will not have to pay a penny towards their mortgage while they get back on their feet.
  • Self-employed people may be eligible to receive support with their tax affairs through HMRC’s Time to Pay service. Arrangements are agreed case-by-case. Businesses can contact HMRC’s new dedicated COVID-19 helpline 0800 024 1222. 
  • The Coronavirus Business Interruption Loan Scheme is available to self-employed individuals with an eligible business entity. By providing an 80 per cent government guarantee on finance facilities up to £5 million, this scheme will help more businesses access the finance they need. Info here: https://www.businesssupport.gov.uk/coronavirus-business-support/ 
  • The Government has delayed changes to IR35. The Government has delayed bringing in changes to IR35 from April 2020 until April 2021, giving self-employed people more time to prepare for the reforms.
  • Introducing emergency legislation to protect renters, so that no one gets evicted if they cannot pay their rent. Emergency legislation will be taken forward as an urgent priority so that landlords will not be able to start proceedings to evict tenants for at least a three-month period. As a result of these measures, no renters in private or social accommodation needs to be concerned about the threat of eviction.
  • Introducing new emergency measures with the energy industry to keep gas and electricity flowing. New emergency measures with the energy industry will protect those most in need. Customers with pre-payment meters who may not be able to add credit can speak to their supplier about options to keep them supplied, benefitting over 4 million customers. More broadly, any household in financial distress will be supported by their supplier, which could include debt repayments and bill payments being reassessed, reduced or paused.

Aren’t you expecting self-employed people to get by on £94 a week – how is that fair?

  • SSP would only be for a 14 day period if someone needs to take time off from their self-employed work. 
  • But SSP is also available in addition to UC and other benefits – such as child benefit and council tax support.

How are these measures for the self-employed different to what has already been announced at Budget?

  • The Budget announce a temporary relaxation of the earnings rules (known as the Minimum Income Floor) for self-employed claimants who are sick or self-isolating according to government guidance. This has already come into effect.
  • This announcement is relaxing the rules for all self-employed claimants, not just those directly impacted by the virus, ensuring those affected by the economic impact of the outbreak are supported, and feel able to follow government guidance on self-isolation and social distancing.