After months of uncertainty regarding the future of businesses in the UK and the worry of mass redundancies in April after the furlough scheme ending, Chancellor Rishi Sunak announced more financial support to help the country’s economy get through the pandemic.
During the Budget Speech, the government made it clear that the furlough scheme will be extended and another 600,000 self-employed will be eligible for grants. But, what does this mean for you?
Following the success of the Coronavirus Job Retention Scheme, which covers 80 percent of employees’ wages for the time they couldn’t work and that managed to protect millions of people from being made redundant, the chancellor decided to extend the scheme until September. Businesses will be expected to pay 10 percent towards their employees’ wages until July, with the amount increasing to 20 percent in August/September.
The Self-Employment Income Support Scheme (SEISS) announced in April 2020 gave a lifeline to many businesses and freelancers who had to close and stop working due to the Coronavirus pandemic. However, millions of self-employed fell through the gap and were unable to claim any financial support from the government. Today, during the Budget Speech, the Government announced its biggest extension with more people becoming eligible for the fourth and fifth grant to come later this year.
The fourth grant, which can be claimed from April 2021, will cover February, March, and April of this year. Those who meet the criteria can claim 80 percent of their average trading profits, capped at £7,500. As a self-employed individual, you can start applying for it from April and the step-by-step guide on how to do this will be published soon via the government’s website.
Earlier the public criticised the scheme as it excluded many newly self-employed. Today, the Government confirmed the new criteria includes individuals who filed a tax return not only for 2018/19 but also for 2019/20. Based on HMRC estimations, there will now be more than 600,000 newly self-employed eligible to apply. The Chancellor stated:
“When the scheme was launched, the newly self-employed couldn’t qualify because they hadn’t all filed a 2019/20 tax return. But as the tax return deadline has now passed, I can announce today that, provided they filed a tax return by midnight last night, over 600,000 more people, many of whom only became self-employed last year, can now claim the fourth and fifth grants.”
The further details and eligibility criteria are set to be announced. Although, based on the previous grants more than 50 percent of your income must have come from self-employment while the average trading profit capped at less than £50,000/year.
If you are a self-employed individual who suffered from an economic downturn resulting from the impact of coronavirus you are eligible for the SEISS grant. As a trader who is unable to trade or faces trading restrictions, you can also claim support. Members of partnerships will also be eligible based on their share profit of the partnership. However, those who work as a limited company or as a trust will not be awarded the grant.
Previously, those self-employed who didn’t have a 2018/2019 tax return couldn’t apply for the scheme. But, with this year’s tax return deadline passed, over 600,000 newly self-employed can now claim fourth and fifth grants if they submitted their 2019/2020 tax return.
All applicants must prove that they will continue to provide a service or trade beyond the end of April.
Depending on their regular income, the grant will cover three months mentioned earlier and set to be at a maximum of £7,500. The previous three grants had the same structure.
The fifth grant will be open to claim in July, covering the timeframe of May, June, and July. However, the chancellor announced the entire 80 percent amount will only be eligible to people whose turnover has fallen by 30 percent or more.
In the next few days, the Government will announce the details on how you can apply for the SEISS grant. Similarly to the previous grants, you will need to have the following:
The applications are not open yet but make sure to stay up to date with announcements and not miss the deadline. More detailed guidance on how to submit your proof of earning can be found on the government’s website.
by Cristina Moraru | 28 Oct 21
3 Interesting Courses For You