Millions of self-employed individuals will receive direct cash grants to help them during the coronavirus outbreak.
In the latest step to protect individuals and businesses, the Chancellor Rishi Sunak, has set out plans that will see the self-employed receive up to £2,500 per month in grants for at least 3 months.
Those eligible will receive a cash grant worth 80% of their average monthly trading profit over the last three years.
This has been designed to bring parity with the Coronavirus Job Retention Scheme, announced by the Chancellor last week, where the Government committed to pay up to £2,500 each month in wages of employed workers who are furloughed during the outbreak.
Self-employed people who are eligible for the new scheme will be able to apply directly to HMRC for the taxable grant, using a simple online form, with the cash being paid directly into their bank accounts.
The scheme will be open to those with a trading profit of less than £50,000 in 2018-19 or an average trading profit of less than £50,000 from 2016-17, 2017-18 and 2018-19. To qualify, more than half of their income in these periods must come from self-employment.
• HMRC will use the average trading profits from tax returns in 2016-17, 2017-18 and 2018-19 to determine the size of the grant.
• this scheme also applies to members of partnerships.
Only those who are already in self-employment and meet the above conditions will be eligible to apply. HMRC will identify eligible taxpayers and contact them directly with guidance on how to apply.
The scheme, will cover the three months to May. Grants will be paid in a single lump sum installment covering all 3 months and will start to be paid at the beginning of June.
Individuals should not contact HMRC now. HMRC will use existing information to check potential eligibility and invite applications once the scheme is operational.
Unfortunately, those who pay themselves a salary and dividends through their own company are not covered by the scheme but will be covered for their salary by the Coronavirus Job Retention Scheme if they are operating PAYE schemes.