Update 26th March
As confirmed by the chancellor, the government will support self-employed and freelance workers by means of a self-employment income support scheme.
The government will pay the self-employed a taxable grant based on their earnings averaged over the last three years. It will be worth up to 80% of averaged earnings and capped at £2,500/month for the next 3 months. It will be extended if needed.
Your self-employed trading profits must be less than £50,000 and more than half of your income come from self-employment. This is determined by at least one of the following conditions being true:
- having trading profits/partnership trading profits in 2018-19 of less than £50,000 and these profits constitute more than half of your total taxable income
- having average trading profits in 2016-17, 2017-18, and 2018-19 of less than £50,000 and these profits constitute more than half of your average taxable income in the same period
To avoid fraud, it will only be open to people who are already self-employed and have completed a tax return for 2019. HMRC will contact you if you are eligible for the scheme and invite you to apply online. They will pay the grant directly to your bank account in one instalment. The scheme should be up and running by 13th May and payments backdated to March. You can continue to work in the meantime.
We do not know if the definition of earnings will include those with holiday letting businesses and this support doesn’t cover ‘directors’ of small family companies that may only draw a small base salary and take the remainder of their profits via dividends.
Please see our latest post for further detail and to check your eligibility to claim