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Friday, March 27, 2020
On 26 March 2020 Rashi Sunak announced support for the self employed; namely a taxable grant of 80% of average earnings calculated over the last three years up to a maximum of £2,500 per month. It is available for those with trading profits of up to £50,000 per annum and whose majority of income is from self employment. It applies to those currently self employed and who have submitted a tax return for 2019. If however a tax return has not been filed a self employed person has four weeks from 26 March 2020 in which to do so.
The new support package for the self employed will be up and running by the beginning of June. HMRC will contact people direct and ask them to complete an online form. In the meantime the self employed can access business interruption loans, their self assessment income tax payments due to be paid in July will be deferred until January 2021 and they can also apply for Universal Credit. If a self employed individual wishes to access the scheme, they must stop working for the period 1 April – 30 June 2020.
If the self employed individual does not have three years of accounts to produce to HMRC, they will look at whatever accounts that have been filed so far or any other evidence they may have and seek to work out an average of earnings from that.
Non Executive Company Directors who do not receive remuneration for their services will not receive anything under the scheme. Employed Directors fall back on the furlough scheme for employment but unfortunately the calculation of their furlough pay is based on their salary and not on their dividends.
If you have a quick query in relation to employment law during the Coronavirus crisis please direct it to admin@samuelphillips.co.uk. If you would like bespoke legal advice from either myself or Robert Gibson we are offering a free 15 minute telephone or Zoom consultation which please arrange through our PA, alisonwhitfield@samuelphillips.co.uk
Written by Robert Gibson, Senior Consultant - Employment Law
Robert is a Senior Consultant at Samuel Phillips and specialises in employment and business matters. He advises in relation to employment and shareholder disputes, including pensions and related issues.
