Chancellor announces support package for the self-employed

Chancellor Rishi Sunak has announced measures to support the self-employed during the Covid-19 crisis.

If they have suffered a loss in income, a taxable grant will be paid to the self-employed, worth 80% of their profits – averaged over the last three years – up to a cap of £2,500 per month.

Initially, this will be available for three months in one lump-sum payment, and will start to be paid from the beginning of June.

It will be called the Coronavirus Self-employment Income Support Scheme, and is open to those who were trading in the last financial year, are still trading now, and are planning to continue doing so this year.

Key facts:

  • Taxable grant of 80% of average monthly profits over the last three years, up to £2,500 per month
  • Available to those with up to £50k annual profits
  • Open to the self-employed right across the UK
  • Available for at least three months
  • No need to apply – HMRC will contact you, you will then fill in an online form and the money will be paid straight into your account
  • The scheme will be accessible no later than June.

It is important to note that some self-employed people will not be eligible for help under this scheme, for example, those who have started self-employment in this tax year.

This scheme will be of benefit to many parents who are self-employed, and experiencing a loss of income due to the Covid-19 pandemic. It will also benefit self-employed childminders who are not receiving income from childcare fees.

Impact on other welfare payments

The interaction of this lump sum payment with your entitlement to benefits is still unclear. The guidance from the Government states that it will be treated as income for the purpose of your Tax Credit calculation but does not mention Universal Credit at time of writing. We are keen to see clarification on this point as otherwise this lump sum payment may impact on Universal Credit entitlement.

If you are experiencing a loss of income at present, and are concerned about waiting until June to receive a payment, contact our Family Benefits Advice Service for free, impartial and confidential advice. Freephone 0800 028 3008 (incoming calls answered from 10am-4pm Monday-Friday) or email at any time.