0370 270 6000

already registered?

Please sign in with your existing account details.

need to register?

Register to access exclusive content, sign up to receive our updates and personalise your experience on brownejacobson.com.

Privacy statement - Terms and conditions

the coronavirus self-employment Income Support Scheme

27 March 2020

Please note: the information contained in this legal update is correct as of the original date of publication

The Government has now announced the measures that it intends to put in place to support the self-employed who are suffering income loss due to the coronavirus pandemic. The headline points are:

  • A taxable grant worth 80% of profits (based on the last three tax returns if self-employed during this period), subject to a monthly cap of £2,500, is being made available.
  • It will initially be for three months, payable in one lump sum. It will start to be paid from the beginning of June (covering March, April and May).
  • Unlike the Job Retention Scheme, there is no obligation to stop working to qualify for the grant.
  • It will be open to those who were trading last year, are still trading now, and who intend to continue to trade this year.
  • It will be limited to those whose trading profit for the last year (or average over the last three years) was less than £50,000.
  • At least half of the individual’s income must come from self-employment (again, as evidence by last year’s tax return, or the average over the last three years).
  • A tax-return must have been filed for 2018/19. This means that the scheme will only apply to those who were self-employed prior to April 2019. Anyone who has missed the deadline for submitting their tax return will have until 26 April to do so, and will then be able to access the scheme (assuming the other criteria are met).
  • HMRC will contact those potentially eligible and ask them to confirm that they meet the eligibility requirements – they do not need to contact HMRC themselves.
  • Those who pay themselves a salary and dividends will not be covered by the scheme (although 80% of the salary element dealt with through PAYE, subject to a monthly cap of £2,500, can be recovered under the Job Retention Scheme, assuming they are furloughed).

The proposed grants will clearly be very welcomed by the self-employed, although many have raised concerns about the time that it will take for them to receive the first grant payment. Some will therefore need to explore the other measures previously announced by the Government if they have a more pressing need for cash flow – such as applying for a business interruption loan, deferring tax payments or accessing universal credit. The same options will apply to the self-employed who do not meet the criteria above to qualify for grants under the new scheme.

Lastly, in the announcement made by the Government, indications were also made that there could well be further tax changes ahead for the self-employed, removing some of the tax advantages such as lower national insurance. The Government had previously indicated that it would be carrying out a review of status issues, including tax implications, as part of its Good Work Plan and so expect to see further announcements on this in due course.

Coronavirus support

We are helping across business, health, education and government sectors:

related opinions

Furloughed employees entitled to full pay for redundancy purposes

The government has brought in new legislation to ensure that any employees who have been furloughed will have their statutory redundancy pay calculated based on their full-time wages as opposed their furloughed pay in the event that they are made redundant.

View blog

Return to work – all change or more of the same?

The Government has announced that its workplace guidance will change with effect from 1 August and its “work from home” message will be removed.

View blog

Will there be a return of employment tribunal fees?

The Government is reportedly considering the reinstatement of tribunal fees in respect of employment claims.

View blog

Redundancy: competitive interview processes

In this case, the Respondent’s appeal was unsuccessful. In the first instance, the decision that it unfairly dismissed various claimants following the closure of the school where they worked. The Claimants were unsuccessful in applying for substantially similar positions at a new school that opened at the same site. Read more here.

View blog

Sarah Hooton

Sarah Hooton

Professional Development Lawyer

View profile

mailing list sign up



Select which mailings you would like to receive from us.

Sign up