HMRC will pay self-employed people a taxable grant worth 80% of average monthly profits over last three-years, up to a maximum £2,500 per month.

The Scheme will be open to anyone with averaged annual profits of up to £50,000 and the Chancellor stated this covers 95% of all self-employed.

Only those in self-employment with a filed tax return for 2019 will be eligible for the Scheme. The Chancellor confirmed that HMRC have set a deadline of 23 April 2020 to file the tax return, if you previously failed to do so by the deadline of 31 January 2020, in order to qualify for the Scheme.

In addition, for those who are self-employed and have other income, they can only claim if the majority of their income is from self-employment.

The Scheme will be in place by June 2020 and HMRC will contact the self-employed directly with details of the payment to be made. In the meantime, the self-employed can continue to earn and this will not affect their ability to receive the grant under the Scheme. In June, they will receive three-months’ worth of payments. 

This does not apply to contractors, personal service companies or business owners who take their remuneration through dividends. For owner-managed companies, this may be a significant issue.