The Chancellor announced the latest support for small businesses on Thursday 26th March 2020, in the form of the Self Employment Income Support Scheme. This is aimed at people who are self employed, and importantly were self employed before the beginning of the current tax year.
It is aimed at levelling the position of the self employed with that of employees, who would potentially benefit from the Coronavirus Job Retention Scheme.
IMPORTANT – The scheme is only available for sole traders and members of partnerships. It is not available if you operate your business through a limited company.
This scheme will allow you to claim a taxable grant worth 80% of your trading profits up to a maximum of £2,500 per month for the next 3 months. This may be extended if needed.
You can apply if you’re a self-employed individual or a member of a partnership and you:
Your self-employed trading profits must also be less than £50,000 and more than half of your income come from self-employment. This is determined by at least one of the following conditions being true:
If you started trading between 2016-19, HM Revenue and Customs (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 must do this 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.
You’ll get a taxable grant which will be 80% of the average profits from the tax years (where applicable):
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 your bank account, in one instalment.
You cannot apply for this scheme yet.
HMRC will contact you if you are eligible for the scheme and invite you to apply online. Individuals do not need to contact HMRC.
You will access this scheme only through GOV.UK. 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.
Once HMRC has received your claim and you are eligible for the grant, they 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.
This latest scheme is in addition to support previously announced for small business, which can be found here. Please also see our previous blog article on the support.
