Are you eligible for £7,500 Covid income boost?

SELF-EMPLOYED workers are being urged to pause before applying for cash from the Government’s income support scheme.

Anyone eligible for the first two phases of the Self-employment Income Support Scheme can now apply for the latest funding of up to £7,500 – covering the period November to January.

But this time around, workers are being asked to keep evidence that any significant reduction in profits is a direct result of Covid-19 restrictions. Anyone unsure should wait until close to the end of January when they are likely to have a better idea that they have lost profits to coronavirus.

The scheme has already been criticised because many workers who received up to £14,070 in the first two phases did not have to prove any loss of income, while others who lost all their work did not receive a penny. The Resolution Foundation has described the £12.7 billion scheme as ‘terribly targeted’, estimating that some 400,000 workers have claimed support despite not losing any income. In contrast, some 500,000 people have received no support at all despite being self-employed.

The scheme was due to be scrapped at the end of October, but at the last minute Chancellor R is hi Sun ak revived it for another six months. Controversially, he made no changes to the exclusions.

These include the newly selfemployed; anyone who earns more than £50,000 a year; or whose nonself- employed income exceeds self- employed earnings. Those who pay themselves dividends are also heavily penalised.

The only change was the requirement to demonstrate that any income loss after November was due to Covid-19. Experts question how Revenue & Customs can monitor this. ‘If you are a builder and didn’t make much money in November, was that because of Covid-19 or because it was tipping it down with rain?’ asks Robert Salter, a director at tax adviser Blick Rothenberg.

He says any self-employed person struggling financially should not be put off applying for the latest support – in line with the Government’s ‘ claim, claim, claim’ message at t he start of the pandemic.