Who does the Self-employed Income Support Scheme help?

On 26 March 2020 the Chancellor announced his new scheme to help people who are self-employed and have no work.

It’s clear he is helping sole traders with profits up to £50K, who receive the majority of income from their sole trader business.

They will be able to access taxable grants, covering 80% of average earnings for the last 3 years, up to a maximum of £2500 per month.

This will be for 3 months initially, possibly longer if the crisis continues.

The system will be online, and HMRC will contact people who are eligible. This will likely be up and running in June but grants will be backdated.

For people worried about the delay, please see my list of bodies that might provide you with support >

Less clear is what happens to three very important types of self-employment.

  1. People who are not sole traders, but run their own one-person limited company
  2. People who are PAYE and move from contract to contract to contract, so do not have an employer to look after them under the Job Retention Scheme announced last week.
  3. People who have entered this type of work within the last 12 months, and so aren’t yet in the HMRC system.

Update: This self-employed income scheme is clearly not aimed at one-person limited companies. This is the first eligibility criterion from the Gov.UK website:

who can apply

With reference to PAYE freelancers, BECTU have tweeted this just after the announcement:

I’m still trying to get clarification on Limited Companies, and will update when I have anything.

[Update 3/4/20: Freelancers running Limited Companies of their own are being told that the salary element of any income falls within the remit of the Coronavirus Job Retention Scheme.

They would have to furlough themselves and would be eligible for part of the salary element of any income, presuming they run a PAYE payroll system.

Dividends are still a problem for HMRC. They can’t see a way of checking who has divvies and where they come from.]

Spreadsheet calculator:

Meanwhile I have thrown together a VERY basic online calculator which might help you to see what 80% of your average monthly profits over three years would look like. Do NOT include PAYE earnings.

SEISS online calculator >

Here’s a downloadable spreadsheet version in two different formats.

Self-employed Income Support Scheme Indicator – Excel format >

Self-employed Income Support Scheme Indicator – Apple Numbers format >

I threw these together very quickly. If you see any errors or problems please get in touch.

Posted on 26 March 2020

  1. V Edwards said:

    I’m no expert, so please tell me if I’m wrong! But based on everything from Sunak’s speech, especially the word ‘profit’ which people have mislabelled as ‘income’ and ‘earnings’ in articles since…..it seems to me that the following businesses will have no help at all:

    – Businesses with high fixed costs, which they’ll be paying for 3 months with no income to cover them.

    Other businesses will probably still have some fixed costs to cover too which means that this 80% is not the same as covering 80% of someone’s wages on PAYE.

    • David said:

      Agreed Vicky – lots to unpick here.

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