Chancellor of the Exchequer, Rishi Sunak, has announced “one of the most significant economic interventions” from a UK Government with a much-needed Self-Employed Income Support Scheme, protecting the nation’s five-million-strong army of self-employed professionals. The scheme will also apply to members of partnerships.
Following in-depth consultations with many business groups and trade unions, the Chancellor has unveiled the new Self-Employed Income Support Scheme, giving self-employed individuals a taxable grant worth 80% of average monthly profits, up to £2,500 a month.
The calculations will be based on individuals’ self-assessment tax returns for the last three tax years, where possible, to obtain a fair and reasonable average.
Those with only one year of trading history will have their income based solely on their most recent self-assessment tax return.
The scheme will be open to all individuals with trading profits up to £50,000 in tax year 2018/19 or an average trading profit of less than £50,000 from earlier tax years, 2016/17, 2017/18 and 2018/19, and where those individuals derive more than half of their income in these periods from self-employment.
All individuals eligible for the new Self-Employed Income Support Scheme will be notified by HM Revenue and Customs (HMRC) in the coming days.
Mr Sunak confirmed that eligible applicants will receive access to funds no later than the beginning of June, with self-employed and freelance taxpayers encouraged to apply for Universal Credit in the meantime.
The Chancellor also provided a lifeline for taxpayers that missed the 31st January 2020 deadline for 2018-19 self-assessment tax returns, with taxpayers given a new four-week deadline to file late returns and avoid additional late-filing penalties.
Delays to payments on account for self-assessment taxpayers due on 31st July 2020 have also been confirmed until 31st January 2021.
The team at TaxAssist Sudbury are diligently working through the details of the Chancellor's new Scheme and we will be releasing further information tomorrow.