Thank you for contacting me about support for the self-employed.
I welcome that measures have been announced to help self-employed people, many of whom are especially vulnerable during this time.
These measures take the form of the Self-Employed Income Support Scheme (SISS), which seeks to match the support already afforded through the Coronavirus Job Retention Scheme (CJRS) by providing a taxable grant worth 80% of a self-employed person’s average monthly profits over the last three years, up to £2,500 a month.
Like the CJRS, the SISS will be open for at least three months and will be extended if necessary.
It is important that this Scheme is fair and that it benefits those whose livelihoods are genuinely at risk due to the COVID-19 pandemic. I understand that to achieve this goal, the SISS has been limited to those who having trading profits of less than £50,000, as determined by the year 2018-19, or an average of trading profits in 2016-17, 2017-18, and 2018-19. These profits must make up over half of your income in 2018-19, or by an average of the past three years.
I should add that, based on my understanding, self-assessment income tax payments that were due to be paid in July can be deferred to the end of January 2021.
Colleagues at the Treasury assure me that the £50,000 threshold was chosen after careful consideration, to ensure the help available is targeted at the most vulnerable individuals during this crisis. I realise this may not be the response that some want to hear, but I understand that as help is available through Universal Credit, anybody who has not met the qualifying criteria for SEISS and is genuinely in need should be able to claim help of comparable value through Universal Credit.
I am sorry to say that people who pay themselves through a mixture of salary and dividends will find that dividends are not covered by the Self-Employed Scheme. I understand that it would be very difficult to know whether any dividend payments resulted from work or from passive investment. I realise this may not be the response you wanted to hear, but I hope its comes as a reassurance that if you are paid a salary as a company director by PAYE, then you can be furloughed for the Job Retention Scheme.
I hope that these measures come as a welcome relief to those in self-employment who have been put in a difficult position during this crisis, I will continue to communicate to the Treasury the challenges faced by the self-employed during the COVID-19 outbreak, and follow this issue closely to ensure that the help promised is effectively delivered.
Thank you for taking the time to contact me on this important issue.
Sally-Ann Hart MP
Member of Parliament
Hastings and Rye