Covid-19: Support for the self-employed

Yesterday evening the Chancellor, Rishi Sunak, announced the package of support for the self-employed we have all been waiting for.

The proposed package has the following features:

• a grant of up to £2,500 per month to self employed individuals (and partners in partnerships) based on their average monthly trading profit over the last three years.
• the scheme is only available to those who have trading profits of less than £50,000 in the 2018/19 tax year or whose average annual trading profits are less than £50,000 over the 2016/17, 2017/18 and 2018/19 tax years
• half of their income must come from self-employment in these periods
• the scheme will apply for the three months to 31 May 2020, initially at least
• HMRC will contact eligible taxpayers, so there is no need to phone them (thankfully!)
• Grants will be paid in a single lump sum in June 2020.

Much as this is great news for a number of self employed individuals, there are some real issues in the detail. Initial questions revolve around those who have become self-employed since 5 April 2019 and are therefore not eligible, what do they do? June 2020 is a long way off when it is only March so what do people do in the interim, and of course that final throw away comment about us all chipping in when the crisis is over – possibly one of the most pleasant ways to say taxes will go up and then some.

As always the devil is in the detail, which of course we are still waiting for in respect of the employee scheme, so don’t expect much clarity soon. Yes a welcome package, but frankly June 2020 before any funds are forthcoming? They say a month is a long time in politics, well, 2 months is a long time if you’re self-employed.

We will continue to update you as more information becomes available.

If you have any concerns regarding your personal and business finances, please contact your usual Monahans representative or call your nearest office.

Information correct at time of publishing.