Corona Virus - Self Employment Income Support Scheme
The Chancellor announced measures on Thursday, 26 March 2020, to support the self-employed and Partners of Partnerships during the Coronavirus period. We have summarised the main announcement below:
The scheme is relevant to the self-employed and members of a partnership who has suffered a loss of income due to Coronavirus.
This scheme will allow them to claim a taxable grant worth 80% of their average monthly trading profits, paid out in a single instalment covering 3 months. This may be extended if needed.
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; and
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 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.
Further consideration
If you started trading between 2016 and 19, HMRC will only use those years for which you filed a Self-Assessment Tax Return.
If you have not submitted your Income Tax Self-Assessment Tax Return for the tax year 2018-19, you should have done so by 23 April 2020.
HMRC will use data on 2018-19 returns already submitted to identify those eligible and will risk assess any late returns filed before the 23 April 2020 deadline in the usual way.
How much you’ll get
You’ll get 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
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.
The grant will be paid directly into your bank account, in one instalment.
How to claim
Check if your eligible to claim via Gov.UK portal.
If you’re eligible, the portal would generate a date as from when you could claim.
You will need your Government Gateway user ID and password, and the bank account details in which you want the payment to be made.
After you’ve applied
Once a claim has been submitted, you will be told straight away if your grant is approved. Payment of the grant would follow within six working days.
The grant is taxable and would need to be reported in your Self assessment Tax Return
Finally, Should you wish to talk through the Self Employment Income Support Scheme please do not hesitate to contact us at enquiries@alexandrwalker.com or on 020 8191 9867.