Originally written by Timothy Adler on Small Business
HMRC has opened its Self-Employed Income Scheme for applications here.
Around 3.5m self-employed freelancers and contractors will already have been contacted by HMRC, deeming that they are eligible for the Self-Employed Income Support Scheme (SEISS).
Freelancers and the self-employed can apply for a one-off payment of up to £7,500 covering three months. This is based at looking at your tax returns for the past three years and then averaging your monthly income. Only freelancers and the self-employed who have been earning up to £50,000 a year can apply for the self-employed coronavirus income support scheme.
>See also: Self-employed Income Support Scheme what it means for you
The grant does not need to be repaid but will be subject to income tax and national insurance.
Money should hit bank accounts by May 25 or six working days after a claim is made.
However, the Treasury is already thinking about dropping the ceiling for self-employed support to £30,000 when the scheme is extended.
And the Self-Employed Income Support Scheme does not cover owner-directors of small businesses. Treasury believes it would be too difficult to calculate an average of three years’ worth of self-employed income from the tax returns of owner-directors, which include passive income such as property and shares.
Help for owner-directors?
Paul Scully, the small business minister, has been trying to help the 1.6m small business owner-directors who fall through the cracks of current coronavirus government bailout schemes.
However, speaking in Parliament yesterday, chancellor Rishi Sunak said that Treasury is aware of the situation, there are no immediate plans to remedy it.
Treasury is mindful of a public perception issue as government does not want to be seen to be rewarding company directors who are seen as paying less tax than those paying in through PAYE.
Although Treasury has said that owner-directors of small businesses could furlough themselves through the Coronavirus Job Retention Scheme, as a company director you can only pay yourself up to £800 through PAYE – which means you have to take the balance of salary as dividends.
For somebody earning £800 per month through PAYE, this would equate to a monthly income of £640.
Further reading
HMRC opens self-employed income support early on May 13
Self-Employed Income Support Scheme now open for applications
via https://ift.tt/2Jn9P8X by Timothy Adler, Khareem Sudlow
