HMRC has released guidance on the coronavirus (COVID-19) Self-employment Income Support Scheme.
Under the scheme, self-employed individuals will be able to claim a taxable grant based on an average of their earnings over the past three years. To be eligible, self-employed workers must have filed a tax return for the 2018/19 tax year and have average trading profits under £50,000 for the past three years.
In the guidance, HMRC said: 'This scheme will allow you to claim a taxable grant worth 80% of your trading profits up to a maximum of £2,500 a month. It will be available for three months, but may be extended. The grant will be subject to income tax and national insurance contributions, but does not need to be repaid.
'You can make a claim for Universal Credit while you wait for the grant, but any grant received will be treated as part of your self-employment income and may affect the amount of Universal Credit you get. Any Universal Credit claims for earlier periods will not be affected. If you receive the grant you can continue to work or take on other employment, including voluntary work.'
Directors of their own companies who are paid through Pay as You Earn (PAYE) may be able to get support via the Coronavirus Job Retention Scheme.
The self-employed scheme will open in mid-May when HMRC will aim to contact those eligible. Payments are scheduled to start in June this year and run for three months, but may be extended if necessary.
Further information on the Self-employment Income Support Scheme can be found here.