We have had a number of enquiries from locums looking to see whether the Government’s Self-Employed Income Support Scheme assists them in any way. 97% of the locums who get work via our Interim Lawyers platform (https://www.interimlawyers.co.uk) are self-employed or work via their own limited company.
This is the current position, taken from Martin Lewis and also a firm of bookkeepers in Manchester (COS Bookkeeping). The government’s own information page is available here.
£2,500 per month and 80% of profits
The grants are worth up to 80% of your profits. This is capped at £2,500 a month and is taxable. As it’s a grant it means you don’t have to pay it back.
Calculation of Profits
Grants are decided on your (actual) profits over the last three years. You must have filed a tax return for 2018/19.
50% + Self-Employment
You must earn more than half your total income from self-employment – so anyone who works as a salaried consultant for one firm but does locum work for others may need to check percentage levels. If this was not the case for 2018-2019 try averaging your 2016/17, 2017/18 and 2018/19 tax returns.
Less than £50k per year income
This means that the grant probably applies more to high street law locums than commercial law locums. Your average trading profit must be less than £50,000/year and operates as a ‘cliff edge’.
Payments in June
This scheme’s expected to start paying out in June. Payments will be likely backdated to cover March, April and May (in form of a lump sum). The scheme will operate across the UK and is set to last for at least three months, though this could be extended.
Unlike for the employee scheme you can keep working. You also do not need to prove coronavirus impact – all who qualify get it.
Company Directors – Dividend and Salary
The Society of Licensed Conveyancers says that company directors who take a mix of dividend and salary from their companies are not covered by this scheme. COS Bookkeeping have said that the government have confirmed that directors can furlough themselves as employees. Martin Lewis has confirmed that both the Treasury and HMRC have confirmed this and that it applies even if you are the only employee.
As a company we dissuade locums from working via these (unnecessary expense, agencies making commission from selling the service, etc.. etc), but if you’re part of an umbrella company you’ll typically be eligible for furloughing – ie the job retention scheme for employed people.
Useful guide for conveyancers from the Conveyancing Association – Conveyancing Association update 26th March
Useful guide for businesses on financial support – Society of Licensed Conveyancers Business Financial Support Guide
(thanks to Rob Hailstone at the Bold Legal Group for the links).