Editor | 14 May 2020
Huge Demand for £7,500 Self-Employed Income Support Scheme

Huge Demand for £7,500 Self-Employed Income Support Scheme

HMRC has revealed that more than 100,000 self-employed Brits applied for financial aid in the first few hours after the income support scheme opened.

The Self-Employment Income Support Scheme (SEISS) was originally announced in March to help freelancers and other self-employed workers who have seen their income dip.

The scheme, which will see self-employed workers able to claim up to £2,500 per month for three months, was originally slated to open in June, but HMRC managed to launch the scheme ahead of schedule.

Launching at 8am on Wednesday 13 May, the website had already processed 110,000 applications by midday.

HMRC also reported that the total value of support agreed so far was £340 million in grants. Martin Lewis from Money Saving Expert calculated that if this money was distributed between 110,000 workers, the average grant would be £3,100 for the three months, or just over £1,000 per month.

The scheme applies to self-employed individuals and members of partnerships who have seen their income affected adversely by coronavirus. They are able to apply for grants - worth 80% of their average monthly trading profits.

Payment will be made in one single installment, capped at £7,500. HMRC reports that it has already informed individuals if they qualify for the scheme and told them when they are eligible to apply.

If you aren’t sure whether you qualify for the scheme, you can complete an eligibility check on the Government website.

The self-employed scheme opening came one day after the Chancellor announced that the employee ‘furlough’ scheme would be extended to October, with some key changes taking place from the end of July.

Chancellor Rishi Sunak has not confirmed whether the self-employed income scheme will also be extended.

Self-employment loans

Unfortunately, some self-employed workers will not benefit from the income support scheme. This includes limited company directors who pay themselves primarily through dividends and those who have only recently become self-employed.

For workers in this position, the best support may be a government-backed ‘bounce back loan’. Affected workers can access loans which are interest and payment-free for the first year, then repaid at 2.5% annual interest after one year.

If your business has been negatively affected by the coronavirus, you will be able to borrow up to 25% of your total (or estimated) annual turnover, up to £50,000. Borrowers will be able to repay the loan early without an additional penalty.

Want to learn more about support for self-employed workers? Speak to a member of the Cloudaccountant today. Call: 0808 281 0303.