95% of Self Employed to Benefit from Rishi Sunak’s Contractor Grant

Self Employed to Benefit from Rishi Sunak contractor grant
Self Employed to Benefit from Rishi Sunak contractor grant

Self Employed to Benefit

Chancellor Rishi Sunak has come with a range of measures which will help the self employed to benefit.

He will give them a taxable grant of 80% of their average monthly profits over the last 3 years. This is up to £2,500 a month or £30,000 a year.

This will apply for the next 3 months and maybe longer. This is open to anyone with trading profits of up to £50,000 a year on average.

To whom is the self employed grant open – Self Employed to Benefit

It’s also only open to those people who get the majority of their income from self employment. It is the majority self employed to benefit.

Only those already in self employment with a taxable income for 2019 need apply. 95% people in majority self employment will benefit. The 5% who will miss out will mainly be those earning more than £200,000 a year according to the Chancellor.

New contractors who haven’t filed tax returns will miss out too.

HMRC are working tirelessly to get this ready for the self employed for the start of June.

How will you get the money from HMRC?

If you are eligible HMRC will contact you to ask you to fill in a simple online form. Then they will pay the grant straight into freelancers’ bank accounts.

Anyone who missed January’s online tax submission have 4 weeks to get it done now.

Self assessment tax payments due in July can now be deferred to January 2021. This will help the self employed to benefit from the Chancellor’s statement.

Contractors Are not Covered by Grant

However, according to the Government “Those who pay themselves a salary and dividends through their own company are not covered by the scheme but will be covered for their salary by the Coronavirus Job Retention Scheme if they are operating PAYE schemes”.

So, there is nothing for contractors in this. The Government seem to have no sympathy for struggling contractors.

Chancellor Rishi Sunak could not resist a final dig at contractors. He said “If we want to benefit from state support, we must all pay in equally in future.”

So, he obviously decided that he would do nothing for those who he sees as not paying equally. There appears to be a deep seated contempt for contractors at the centre of Government.. It has been there for many years.

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For all critical IR35 news and advice for contractors click on IR35 News.

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Many private sector contractors are likely to be told by their client company either that they must operate as an off-payroll employee or join an umbrella company. It’s time to plan for that now.

They need to look at umbrellas ASAP.

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