The Government will help 3.8 million self employed people with a grant of up to 80% of their monthly profits for three months. However, it will miss out probably the same number of people who earn some or all their income from working for themselves. To qualify for the Self-employed Income Support Scheme, you must have filed a self-assessment tax return for 2018/19 (the deadline to do that was extended to 23 April) and filled in the self-employment pages. Anyone who started their self-employment on 6 April 2019 or later will not fulfil this condition, leaving at least 300,000 people out.
Two further key conditions: first, you earned more of your income from self-employment than from all other taxable income including from a job, pensions and investments. You can fulfil this condition either in 2018/19 alone or on average over 2018/19, 2017/18 and 2016/17 if you had self-employment income in those years.
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The second key condition is that your self-employment taxable profit is under £50,000. That can either just be in 2018/19 or the average of the last three years if you were self-employed then.
If you can jump these hurdles, you will get a grant from the Government of 80% of your average annual profits over three months (a fifth of your annual profits). The average will be taken over the years 2018/19, 2017/18 and 2016/17, ignoring years when you weren’t self-employed. There is an upper limit of £2,500 a month if your annual profits were £37,500 or more, up to the limit of £49,999.
People who trade through a limited company or a personal services company are excluded. Self-employed people who qualify can carry on working. The payment will not be made until sometime in June. HMRC will contact those who qualify. How it will distinguish this communication from the many scams that are doing the rounds is not clear. Neither is it clear if others who think they are entitled can claim. Until June, the Government suggests self-employed people who cannot manage should claim Universal Credit. If you’re over pension age, try pension credit.
Paul Lewis presents Money Box on R4