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Winter economic plan: self-employed support

by | Oct 1, 2020 | Business owners, Construction, Covid, Manufacturing & engineering, Owner managed business, Property, Uncategorized

Self Employed

More Government support measures for the self-employed have been announced to help lessen the economic impacts of COVID-19.

Having scrapped this year’s Autumn Budget for the second successive year, Chancellor Rishi Sunak revealed the “next phase” of financial support.

Sunak was careful to emphasise the Government’s approach to it “must be different to that which came before”.

The UK’s five million self-employed population wasn’t forgotten, however, as the Chancellor extended the self-employed income support scheme (SEISS), with new grants covering the next six months.

Extension to SEISS grants

This scheme will work on “similar terms” to the new job support scheme, offering limited grants to those whose work continues to be affected by the pandemic.

An initial grant will cover a three-month period from 1 November 2020 to 31 January 2021. This is set to cover 20% of a self-employed individual’s average monthly trading profits, capped at a total of £1,875 in total.

A second grant will also be made available to cover dates from 1 February 2021 to 30 April 2021, but further details have yet to be set.

The extension will only be available to self-employed people who are currently eligible for the SEISS and actively continuing to trade, but are facing reduced demand because of the coronavirus pandemic.

How does it compare to the last grants?

The next set of grants offer much more limited support than the last phases of the scheme, with extra conditions attached.

When the SEISS first launched in March, it offered self-employed individuals a grant of 80% of their average monthly trading profits to cover three months, up to a limit of £7,500 in total.

This was reduced in the second grant announced in May, which provided 70% of average monthly trading profits, capped at £6,570. This current round of grants is due to close for new applications on 19 October 2020.

Neither of the previous instalments required the applicant to be “actively trading” and “impacted by reduced demand”.

The Association of Independent Professionals and the Self-Employed called the extension “woefully inadequate”, and said it will exclude a third of self-employed people.

More time for self-assessment

Self-assessment taxpayers were given the option to defer payments on account that were due in July 2020.

A further extension has been announced, so that taxpayers with up to £30,000 in self-assessment liabilities due in January 2021 will be able to use HMRC’s time-to-pay facility to pay over an extra 12 months.

In effect, this means those who deferred their payments on account in July 2020 will not need to pay their bill in full until 31 January 2022.

Get in touch to discuss the new measures.