COVID-19: Support for the self-employed

The Government has put in place a range of measures for self-employed individuals, including a Self-employment Income Support Scheme (SEISS), which will provide direct cash grants worth 80% of trading profits up to a maximum of £2,500 per month.

Self-employment Income Support Scheme

On Thursday 24 September 2020, the Government announced it was continuing its support for millions of self-employed individuals by extending the Self Employment Income Support Scheme Grant (SEISS).

The extension will provide two grants and will last for six months, from November 2020 to April 2021. Grants will be paid in two lump sum instalments each covering a three-month period.

The first grant will cover a three-month period from the start of November until the end of January. HMRC will provide a taxable grant covering 20 per cent of average monthly trading profits, paid out in a single instalment covering 3 months' worth of profits, and capped at £1,875 in total.

HMRC are providing broadly the same level of support for the self-employed as is being provided for employees through the Job Support scheme.

The second grant will cover a three-month period from the start of February until the end of April. HMRC will review the level of the second grant and set this in due course.

The grants are subject to Income Tax and National Insurance Contributions.

HMRC will provide full details about claiming and applications in guidance on GOV.UK in due course.

Who can apply?

You can apply if you’re a self-employed individual or a member of a partnership and you:

  • Have submitted your Income Tax Self-Assessment tax return for the tax year 2018-19
  • Traded in the tax year 2019-20
  • Are trading when you apply, or would be except for COVID-19
  • Intend to continue to trade in the tax year 2020-21
  • Have lost trading/partnership trading profits due to COVID-19.

Your self-employed trading profits must also be less than £50,000 and more than half of your income come from self-employment. This is determined by at least one of the following conditions being true:

  • Having trading profits/partnership trading profits in 2018-19 of less than £50,000 and these profits constitute more than half of your total taxable income
  • Having average trading profits in 2016-17, 2017-18, and 2018-19 of less than £50,000 and these profits constitute more than half of your average taxable income in the same period

If you started trading between 2016-19, HMRC will only use those years for which you filed a Self-Assessment tax return.

If you have not submitted your Income Tax Self-Assessment tax return for the tax year 2018-19, you must do this by 23 April 2020.

HMRC will use data on 2018-19 returns already submitted to identify those eligible and will risk assess any late returns filed before the 23 April 2020 deadline in the usual way.

How much you will get

You will get a taxable grant which will be 80% of the average profits from the tax years (where applicable):

  • 2016 to 2017
  • 2017 to 2018
  • 2018 to 2019

To work out the average HMRC will add together the total trading profit for the 3 tax years (where applicable) then divide by 3 (where applicable) and use this to calculate a monthly amount.

It will be up to a maximum of £2,500 per month for 3 months.

HMRC will pay the grant directly into your bank account, in one instalment.

How to apply

You cannot apply for this scheme yet.

HMRC will contact you if you are eligible for the scheme and invite you to apply online.

Individuals do not need to contact HMRC now and doing so will only delay the urgent work being undertaken to introduce the scheme.

You will access this scheme only through GOV.UK. If someone texts, calls or emails claiming to be from HMRC, saying that you can claim financial help or are owed a tax refund, and asks you to click on a link or to give information such as your name, credit card or bank details, it is a scam.

After you have applied

Once HMRC has received your claim and you are eligible for the grant, they will contact you to tell you how much you will get and the payment details.

If you claim tax credits, you will need to include the grant in your claim as income.

Other support

Additional support includes:

For more information on Government support for self-employed people or sole traders

Income Tax payment holidays/support

Income Tax payments due in July 2020 under the self-assessment system will be deferred to January 2021. You may also be able to agree a bespoke Time to Pay arrangement.

HMRC has set up a dedicated phone helpline to support businesses and self-employed people concerned about not being able to pay their tax due to COVID-19.

For help and advice:

  • Call 0800 024 1222 - Monday to Friday 8am to 4pm.

For more information on help with your taxes read HMRC tax information on GOV.UK

Business Interruption Loan Scheme

Self-employed individuals, particularly those who operate as a company, may be eligible for this scheme which supports SMEs with access to loans, overdrafts, invoice finance and asset finance of up to £5 million and for up to 6 years. 

Further information on COVID-19: Support for businesses

Claiming Statutory Sick Pay and/or Universal credit if self-employed

Self-employed people who are not eligible for Statutory Sick Pay, can now make a claim for Universal Credit or Contributory Employment and Support Allowance.

For the duration of the outbreak, the Government has suspended the universal credit minimum income floor for those with COVID-19 or who are self-isolating, ensuring self-employed claimants will receive support.

If you are self-employed and receiving Universal Credit and you have COVID-19 or are advised to self-isolate, the requirements of the Minimum Income Floor will be temporarily relaxed. This change took effect on 13 March and will last for the duration of the outbreak, to ensure that self-employed UC claimants will receive support.  

View 'New Style' Employment and Support Allowance

Council tax: COVID-19 Hardship Fund

Richmond Council has confirmed it will be relaxing its normal rules on rent arrears and non-payment of council tax. No enforcement or recovery action will be initiated against people who fall behind with their council tax payments.

As part of its response to COVID-19, the government announced in the Budget on 11 March that it would provide local authorities in England with £500 million of new grant funding to support economically vulnerable people and households in their local area. With some people facing reduced incomes or job losses as a result of the outbreak.

For more information read Richmond COVID-19 Hardship Fund.

Mortgage Payment Holidays

The Government has announced that all homeowners will be able to claim a three-month break from their mortgage repayments if they are unable to pay because of coronavirus.

Read about mortgage payment holidays.

Protection for renters affected by coronavirus

The Government has announced measures to protect renters affected by coronavirus. As a result, no renter in either social or private accommodation will be forced out of their home during this difficult time.

Further support

Updated: 14 October 2020