Initially announced Corona-virus wage subsidies by the government for the employees didn’t cover self-employed and directors which raised a lot of criticism but finally the long-awaited good news for the country’s 5 million self-employed workers has been announced, on Thursday 26th March.
The employees were covered by the Coronavirus Job Retention Scheme (CJRS) and the self-employed now are covered by Coronavirus Self-Employed Income Support Scheme (CSISS).
Key points of the scheme are,
- Self-employed who are eligible for the scheme will be paid 80% of their average income per month over the tax years 2016/17, 2017/18 and 2018/19
- There is a cap of £2500 per month
- The financial support will not be available until mid-June
- Those who have setup as self-employed April 2019 shall not be considered under the scheme
- The scheme is open to the self-employed who were trading during last financial year, still are trading and also have a plan to continue
- The scheme will be open to those with a trading profit of less than £50,000 in 2018-19 or an average trading profit of less than £50,000 from 2016-17, 2017-18 and 2018-19
- Self-employed workers on a low income and affected by the economic impacts of COVID-19 can access the full range of the welfare system, including Universal Credit
- Minimum Income Floor of Universal tax Credit will not be applied for Self-employed and universal credit should be paid within a few days
- Self-assessment payment due on account by 31 July 2020 can be deferred until January 2021
How to claim?
- People do not need to apply or contact HMRC
- HMRC will itself invite eligible self-employed workers to make applications by using the existing information
- The self-employed worker will confirm that they meet the eligibility requirements along with providing their bank details
- The grant will be paid straight into the bank account
What about Directors owning Limited Company?
Those who pay themselves a salary and dividends through their own company are not covered by the scheme but will have 80% of their salary covered by the Coronavirus Job Retention Scheme if operating through PAYE.
