Government Support for the Self-Employed

This page provides advice and information about Government support for the self-employed during the coronavirus pandemic.

Self-employment Income Support Scheme

The Self-employment Income Support Scheme (SEISS) provides financial assistance to self-employed people who have lost income due to coronavirus.

Under the scheme, the self-employed can claim a taxable grant worth 80% of their trading profits up to a maximum of £2,500 per month for the next three months.

The scheme is now closed for the first grant. The scheme allows you to claim a second taxable grant. Find out more here.

The grant will be worth 70% of their average monthly trading profits, paid out in a single instalment covering three months’ worth of profits, and capped at £6,570 in total.

To be eligible, self-employed trading profits must be less than £50,000 and more than half of your income must come from self-employment.

A number of updates have been made to the scheme guidance:

  • New guidance has been published if you have been overpaid, made a claim in error and were not eligible for the grant or would like to make a voluntary repayment.
  • Guidance on how HMRC works out trading profits and non-trading income has been updated to include that losses are not included in your non-trading calculation.
  • Guidance on how different circumstances affect the scheme has been updated to include what supporting evidence you may be asked for if having a new child affected the trading profits you reported for the tax year 2018 to 2019.

Go to www.gov.uk/guidance/claim-a-grant-through-the-coronavirus-covid-19-self-employment-income-support-scheme for more information.

HMRC has also published additional guidance about the scheme to clarify:

  • The treatment of losses, averaging and multiple trades.
  • The calculation of self-employed profits and what is meant by total income.
  • That individuals are able to continue working, including taking on employment role.
  • That individuals can access Universal Credit and the SEISS.
  • Overlaps between the SEISS and the Coronavirus Job Retention Scheme.

Read the updates at www.gov.uk/guidance/claim-a-grant-through-the-coronavirus-covid-19-self-employment-income-support-scheme and www.gov.uk/guidance/how-hmrc-works-out-total-income-and-trading-profits-for-the-self-employment-income-support-scheme.

On 24 September, the Government announced it will extend the Self-Employment Income Support Scheme grant. An initial taxable grant will be provided to those who are currently eligible for SEISS and are continuing to actively trade but face reduced demand due to coronavirus. The initial lump sum will cover three months’ worth of profits for the period from November to the end of January next year.

On 22 October, the Chancellor confirmed the SEISS grant available for November 2020 to January 2021 will be based on 40% of three- month average trading profits instead of 20%. This will mean the maximum grant available will increase from £1,875 to £3,750.

Self-Assessment payments deferred

Income Tax payments due in July 2020 under the Self-Assessment system are deferred until January 2021. This is an automatic offer with no applications required. Go to www.gov.uk/government/publications/guidance-to-employers-and-businesses-about-covid-19/covid-19-support-for-businessess for more information.

On 24 September, the Government announced that self-assessment taxpayers will be able to benefit from a separate additional 12-month extension from HMRC on the “Time to Pay” self-service facility, meaning payments deferred from July 2020, and those due in January 2021, will now not need to be paid until January 2022.

Financial support finder tool

The Government has launched a new tool to help the self-employed find coronavirus financial support. After answering a series of questions, self-employed people are signposted to a list of support they may be entitled to.

Claiming Universal Credit

Self-employed people who may be ineligible for other government support during the coronavirus outbreak may wish to consider applying for Universal Credit.

The Government has temporarily made changes to how it calculates Universal Credit entitlements to support self-employed people on low incomes.

Call the Universal Credit helpline on 0800 328 5644 or go to www.gov.uk/self-employment-and-universal-credit for more information.

Delay to IR35 reforms

Due to the coronavirus outbreak, the extension to the private sector of the requirement to decide whether the IR35 rules apply to freelance workers and contractors they hire have been delayed until 6 April 2021 to help protect contractors’ livelihoods. Go to www.gov.uk/government/news/off-payroll-working-rules-reforms-postponed-until-2021 for more information.

HMRC helpline

HMRC has introduced a dedicated COVID-19 helpline to support self-employed people in financial distress and with outstanding tax liabilities to receive help with their tax affairs. Contact the helpline on 0800 0159 559.

Support paying taxes

Self-employed people in financial distress, and with outstanding tax liabilities, may be eligible to receive support with their tax affairs through HMRC’s Time To Pay service. These arrangements are agreed on a case-by-case basis and are tailored to individual circumstances and liabilities.

Call the HMRC COVID-19 helpline on 0800 0159 559 for more information.

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