Covid-19 Support for Self-Employed.

The Chancellor announced today that self-employed can claim a taxable grant which will be 80% of the average profits from the tax years (where applicable):

• 2016 to 2017
• 2017 to 2018
• 2018 to 2019

If you’re a director of your own company and paid through PAYE you may be able to get support using the Job Retention Scheme.

How much you’ll get

To work out the average HMRC will add together the total trading profit for the 3 tax years (where applicable) then divide by 3 (where applicable), and use this to calculate a monthly amount.

It will be up to a maximum of £2,500 per month for 3 months.

HMRC will pay the grant directly into the individual’s bank account, in one instalment.

Who can apply

You can apply if you’re a self-employed individual or a member of a partnership and you:

• have submitted your Income Tax Self Assessment tax return for the tax year 2018-19
• traded in the tax year 2019-20
• are trading when you apply, or would be except for COVID-19
• intend to continue to trade in the tax year 2020-21
• have lost trading/partnership trading profits due to COVID-19

Your self-employed trading profits must also be less than £50,000 and more than half of your income must come from self-employment. This is determined by at least one of the following conditions being true:

• having trading profits/partnership trading profits in 2018-19 of less than £50,000 and these profits constitute more than half of your total taxable income
• having average trading profits in 2016-17, 2017-18, and 2018-19 of less than £50,000 and these profits constitute more than half of your average taxable income in the same period

If you started trading between 2016-19, HMRC will only use those years for which you filed a Self-Assessment tax return.

How to apply

You can apply for the scheme from Wednesday 13 May. Please follow this link where the online claim will become available:

HMRC will contact you if you are eligible for the scheme and invite you to apply online. : https://www.gov.uk/guidance/claim-a-grant-through-the-coronavirus-covid-19-self-employment-income-support-scheme

If you have not been contacted, please refer to the HMRC site to check your eligibility and set up a Government gateway user ID and password: https://www.gov.uk/guidance/claim-a-grant-through-the-coronavirus-covid-19-self-employment-income-support-scheme#eligible You will need to provide information on your tax reference, personal details in order to do this.

If someone texts, calls or emails claiming to be from HMRC, saying that you can claim financial help or are owed a tax refund, and asks you to click on a link or to give information such as your name, credit card or bank details, it is a scam.

After you’ve applied

Once HMRC has received your claim and you are eligible for the grant, we will contact you to tell you how much you will get and the payment details.

If you claim tax credits you’ll need to include the grant in your claim as income.

Other help you can get

The government is also providing the following additional help for the self-employed:

• deferral of Self Assessment income tax payments due in July 2020 and VAT payments due from 20 March 2020 until 30 June 2020
• grants for businesses that pay little or no business rates (for Scottish businesses refer to https://www.mygov.scot/non-domestic-rates-coronavirus/)
• increased amounts of Universal Credit
• Business Interruption Loan Scheme
• UK
  • Tech and Life Sciences – Future Fund Innovate: https://www.gov.uk/government/news/billion-pound-support-package-for-innovative-firms-hit-by-coronavirus
• Scotland:
  • Specific sector funds for creative industries, aquaculture, coastal businesses, independent film and tv production https://findbusinesssupport.gov.scot/coronavirus-advice/support-by-industry-sector