Further measures to support self-employed people have been announced...
The Chancellor of the Exchequer presented our Winter Economy Plan to Parliament on Thursday 24 September 2020 to outline how the Government will support jobs and the economy over the coming months. The Winter Economy Plan included new measures to help support the self-employed.
Self-Employed Income Support Scheme Grant Extension
The Government recognises the continued impact that COVID-19 has had on the self-employed and has taken action to provide support. The SEISS Grant Extension provides critical support to the self-employed. The grant will be limited to self-employed individuals who are currently eligible for the SEISS and are actively continuing to trade but are facing reduced demand due to COVID-19. The scheme will last for 6 months, from November 2020 to April 2021.
The extension will be in the form of two taxable grants. The first grant will cover a three-month period from the start of November until the end of January. This initial grant will cover 20%of average monthly trading profits, paid out in a single instalment covering 3 months’ worth of profits, and capped at £1,875 in total. The second grant will cover a three-month period from the start of February until the end of April. The government will review the level of the second grant and set this in due course.
Enhanced Time to Pay for Self-Assessment taxpayers
The Government will give the self-employed and other taxpayers more time to pay taxes due in January 2021, building on the Self-Assessment deferral provided in July 2020. Taxpayers with up to £30,000 of Self-Assessment liabilities due will be able to use HMRC’s self-service Time to Pay facility to secure a plan to pay over an additional 12 months. This means that Self-Assessment liabilities due in July 2020 will not need to be paid in full until January 2022. Any Self-Assessment taxpayer not able to pay their tax bill on time, including those who cannot use the online service, can continue to use HMRC’s Time to Pay Self-Assessment helpline to agree a payment plan.
Previous measures already announced...
Self-Employed Income Support Scheme
- The Government will pay self-employed people across the whole UK who have been adversely affected by coronavirus a grant worth 80 per cent of their average monthly profits over the last three years, up to £2,500 a month, for three months – but it will be extended for longer if necessary.
- The Government will make it simple for self-employed people to get the financial support they need. Self-employed people who are eligible will be contacted by HMRC directly, asked to fill out a simple online form, and HMRC will pay the grant directly into their bank account. We expect people to access the scheme by the beginning of June.
- We are ensuring our support reaches those self-employed people who are most in need of it. The scheme will only be open to those with trading profits up to £50,000, leaving 95 per cent of people who are majority self-employed eligible for the scheme. HMRC will also ask people to demonstrate that the majority of their income comes from self-employment, and, to minimise fraud, only those who are already in self-employment, and who have a tax return for 2019, will be able to apply.
On 20 March 2020, the Chancellor strengthened measures to help those who are self-employed. This includes strengthening the safety-net for the self-employed, who will benefit from a relaxation of the earnings rules under universal credit and deferring income tax self-assessment payments due in July 2020.
- We have already made access to both Universal Credit and ESA more generous and accessible – for example by increasing the UC allowance by £20 per week.
- We have temporarily removed the 7 waiting day requirement in ESA and we have relaxed Universal Credit’s Minimum Income Floor for all self-employed people.
- We are also deferring income tax self-assessment payments from July to January next year to help those who are self-employed.
Providing self-employed people with a safety net:
Supporting people through the welfare system so that nobody is penalised for doing the right thing. We will make it quicker and easier to access benefits. Those on contributory ESA will be able to claim from day 1, instead of day 8. And we are relaxing the requirement for anyone to physically attend a jobcentre – everything can be done by phone or online.
Suspending the minimum income floor for twelve months – meaning self-employed people can now access, in full, Universal Credit at a rate that is equivalent to Statutory Sick Pay for employees. For the self-employed, we are also deferring income tax self-assessment payments for July until the end of January 2021.
Strengthening the safety net for those who need it – increasing Universal Credit and Working Tax Credit by £1,000 a year – a cash injection of nearly £7 billion in the welfare system. We are increasing the Universal Credit standard allowance, for the next 12 months, by £1,000 a year. We will also increase Working Tax Credit by the same amount for the next 12 months.
Supporting small businesses:
Providing grants to the smallest of businesses of £10,000. We are providing £10,000 grants to the 700,000 of our smallest businesses.
Deferring the next three months of VAT tax, a direct injection of over £30 billion of cash to employers, equivalent to 1.5 per cent of GDP. That means no business will pay any VAT from now until the end of June, and they will have until the end of the financial year to repay those bills.
The Coronavirus Business Interruption Loan Scheme will now be interest free for twelve months, an extension from the initial announcement of six months. We have already introduced and announced an extension to the Business Interruption Loan Scheme, which is for small and medium-sized businesses. The Chancellor expanded the amount that can be borrowed from £1.2 million to £5 million, and we are now extending the time frame of no interest on these loans from six months to twelve months.
Helping people with the cost of living during this time:
Introducing emergency legislation to protect renters, so that no one gets evicted if they cannot pay their rent. Emergency legislation will be taken forward as an urgent priority so that landlords will not be able to start proceedings to evict tenants for at least a three-month period. As a result of these measures, no renters in private or social accommodation needs to be concerned about the threat of eviction.
Announcing nearly £1 billion of support for renters, by increasing the generosity of housing benefit and Universal Credit, so that the Local Housing Allowance will cover at least 30 per cent of market rents in local areas.
Introducing a three-month mortgage holiday for those in difficulty due to coronavirus – so that people will not have to pay a penny towards their mortgage while they get back on their feet. And in the coming days, we will go much further to support people’s financial security. We will work with trade unions and businesses to develop new forms of employment support to help protect people’s jobs and incomes through this period.
Introducing new emergency measures with the energy industry to keep gas and electricity flowing, looking after vulnerable customers who may be in financial difficulty due to Covid-19. Any household in financial distress will be supported by their supplier so that their energy does not get cut off.