Chancellor announces financial support for some of the self-employed impacted by Covid-19
By John Brace (Editor)
The Right Honourable Rishi Sunak MP (the Chancellor of the Exchequer) announced today (26th March 2020) the government’s plans to support the self-employed (which the author of this piece will declare as an interest).
Those eligible will be written to by HMRC (Her Majesty’s Revenue and Customs) and asked to apply online. However there are caveats:-
- The cash grant will be classed as taxable* income and will not be paid till June 2020 (which will be a lump sum covering the next 3 months period). *The Chancellor gives with one hand and takes away with the other.
- Those who pay themselves a salary and dividends through personal service companies don’t qualify for this.
- There are further details on the HMRC website here.
- It also applies to partnerships.
- It only applies to those who have lost trading or partnership trading profits due to COVID-19.
- There is a maximum of £2,500 a month and it looks like this will just be a one-off.
- For those on tax credits, it will need to be declared as income.
- There are many other caveats and loopholes (such as a requirement that more than half a person’s income must be from self-employment).
- Essentially for those who do apply, it will be calculated at 80% of the monthly profits over the tax years 2016-17, 2017-18 and 2018-19.
- The above is not meant as accountancy or tax advice.
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