Chancellor reveals aid for sole traders
Michael Chadwick, founding Director at Chadwick & Company, outlines the newly announced package of support for the self-employed.
Following last weeks announcement of Government aid to employed individuals, the Chancellor has now announced measures to support the estimated 5 million self employed people in the UK.
Rishi Sunak MP told the self-employed: “You have not been forgotten” before announcing that self-employed workers can now apply for a grant of up to 80% of their monthly profits (average of the last three years tax returns) to help them cope with the impact of lock-down and Covid-19.
The maximum payment will be £2,500 per month and it will be paid in a lump sum. However, the money is expected to arrive at the start of June at the earliest.
- At least half of the claimants total income needs to have come from self-employment (as registered on the 2018-19 tax return filed in January 2020). Anyone who missed the filing deadline has four weeks from now to get it done and still qualify.
- The business must have traded in the tax year 2019/20.
- The scheme is only open to those with trading profits under £50,000 a year.
- The self-employed can continue to work as they receive support.
- The grants will be taxable, and will need to be declared on tax returns by 31 January 2022.
- Company owners who pay themselves a dividend are not covered.
You cannot apply for this scheme yet, HMRC will contact you if you are eligible and invite you to apply online.
If waiting till June is impossible, then you may wish to consider a claim under Universal Credit or one of the special Government backed business interruption loans.
If you have any queries about this Government aid, please do not hesitate to email us at email@example.com.