27/03/2020

New support announced for self-employed Scots affected by COVID-19

27/03/2020

New support announced for self-employed Scots affected by COVID-19

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Support for Scottish self-employed workers affected by COVID-19 has been announced by Chancellor Rishi Sunak.

In a Downing Street press conference last night (March 26) he pledged to help the 330,000 self-employed workers across Scotland with what he hailed to be “one of the most generous packages in the world.”

Mr Sunak announced workers affected by coronavirus can apply for a grant worth 80% of their average monthly profits over the last three years, up to £2,500 per month.

The grant, called the Self-Employment Income Support Scheme, will be available for up to three months to those who report annual profits of up to £50,000.

He declared the self-employed ‘have not been forgotten’ in his address to the nation as he said that self-employed and freelance Brits can apply for a lump sum payment which will be made at the beginning of June.

What is the Self-Employment Income Support Scheme?

The scheme was announced after the UK Government came under fire for not providing support for the five million self-employed workers around Britain.

Earlier this week Scottish Economy Secretary Fiona Hyslop and Finance Secretary Kate Forbes wrote to the Chancellor calling on him to offer more support to those in Scotland who work for themselves.

Now the new scheme, designed by HMRC with the help of stakeholders such as the TUC, Federation of Small Businesses and IPSE – The Association of Independent Professionals and the Self-Employed, aims to help 95% of people who earn most of their income through self-employed work.

Speaking of the grant, the Chancellor said: “Self-employed people are a crucial part of the UK’s workforce who’ve understandably been looking for reassurance and support during this national emergency.

“The package for the self-employed I’ve outlined today is one of the most generous in the world that has been announced so far. It targets support to those who need help most, offering the self-employed the same level of support as those in work.

“Together with support packages for businesses and for workers, I am confident we now have the measures in place to ensure we can get through this emergency together.”

How do you apply?

Self-employed workers such as plumbers, hairdressers, cleaners and electricians, to name just a few, will be able to apply directly through HMRC for the taxable grant using a simple online form.

The payment will be made directly into the applicant’s bank account at the start of June and it will cover three months to May.

Anyone who missed the January 31 tax return deadline has been offered a four-week window to file to have the opportunity to apply.

Open to anyone deemed to be an eligible taxpayer, HMRC will contact those who qualify directly with applicants being asked not to contact HMRC themselves.

However, self-employed workers who pay themselves a salary and dividends through their own company will not qualify for the scheme. Instead, if they are operating PAYE schemes their salary will be covered by the Coronavirus Job Retention Scheme.

Is the grant open to all self-employed workers?

Unfortunately, not all self-employed Brits will be able to apply for the grant.

Those without three years’ worth of accounts will need to wait on the Treasury announcing a solution and advise of the next steps in the process.

While those with no accounts, or the recently self-employed, will also not be able to benefit from the new scheme.

Anyone who is unable to make sure of the new grant is encouraged to make use of a range of welfare benefits, including universal credit and tax breaks.

Accessing alternative support

In a bid to support struggling self-employed Brits throughout the outbreak the government announced a multi-million-pound boost into welfare benefits.

The Chancellor announced a £7 billion cash injection to universal credit, income tax and VAT deferrals.

The funding will now mean that people who work for themselves will be able to access universal credit on the same basis as those in employment.

The minimum income floor has been temporarily removed, allowing freelancers and self-employed people the chance to access the benefit at a rate equivalent of statutory sick pay.

Reports show that almost 500,000 people applied for universal credit in just nine days, in the hope to receive £94.25 per week for up to 28 weeks.

To find out more, visit the government website here.

Self-employed Scots who find themselves in self-isolation or unable to work because of coronavirus can also apply for contribution-based employment and support allowance (ESA).

Open to Scots aged 25 and older, ESA offers eligible applicants the opportunity to receive £73 per week every fortnight. To help offer more support during the outbreak, payment is now available from day one of sickness instead of day eight.

For further details and a guide to applying, visit here.

What’s more, self-employed workers will not be expected to pay the next round of self-assessment tax payments, originally due on July 31, until January 2021 and VAT will be deferred for the next quarter, saving businesses £30bn.

Self-employed Brits can also make the most of £1 billion more support for renters and access to three-month mortgage holidays.

 

If you’re self-employed and concerned about debt during the coronavirus outbreak, speak to an expert advisor on 0808 2085 195.

 

 

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