Self-employment Income Support Scheme
The government introduced the Self-employment Income Support Scheme to help self-employed workers cope with the impact of Coronavirus on their businesses. The government has pledged to pay up to 80% of the average monthly trading profit to the maximum of £2500 per month over three months starting from March 2020, however on 29 May 2020 the government announced an extension of the scheme until August 2020. If you have been negatively affected by the Coronavirus, you will be eligible to make a claim for the grant on or before 13 July 2020. If your business continues to be adversely affected by the pandemic you will be eligible to make a claim for the second grant in August 2020 even if you did not make a claim for the first grant.
What is the grant?
The grant does not need to be paid back to the government however you will be liable for Income Tax and Class 4. You can continue to work, take another employment, start a new trade with the grant. The amount you are eligible to claim will be determined by HMRC however it can be calculated here using your:
- Self-assessment Unique Taxpayer Reference (UTR)
- National insurance Number
Who is eligible to claim?
You are eligible to claim the grant if you are self-employed or part of a partnership and you:
- Traded in the tax year 2018/19 and submitted a Self-assessment tax return on or before 23 April 2020 for the year you traded.
- Traded in the tax year 2019 to 2020
- Plan to trade in the tax in the next tax year 2020 to 2021
- Plan to carry on the trade which has been affected by the pandemic
All conditions have to be satisfied to be eligible for the grant.
You will be unable to claim the grant if you are working as a director of limited company or operating through a trust. If you do not qualify for the grant based on the Self-assessment on 2018/2019, HMRC will assess you based on the tax returns on 2016, 2017 to 2018.
It is important to note that Self-Employment Income Support Scheme is not classified under “access to public funds” therefore it is available to all types of work visas. The grant has to be claimed by you, we can offer assistance and advice regarding the grant, however we will be unable to make a claim on your behalf as this will trigger a fraud alert and delay the receipt of the grant.
How is the grant claimed?
To claim the grant you will need to have:
- Government gateway ID and password.
- UK Bank details with your address linked to your bank account (the bank account should be able to accept BACs payments).
You should be able to prove to HMRC that your trade has been impacted negatively by the Corona virus.
What if I am not eligible?
If you have used to information above to work out the eligibiity and you do not meet the criteria, you can contact HMRC to review your eligibility.
How much will I get?
The grant is based on the average profit or loss over the last three tax years 2016/17, 2017/18, 2018/2019. These profits for these tax years will be added together and divided by 3 and the average annual amount determined. The grant is worth 80% of the average monthly amount of the profits paid out as a single instalment for 3 months of profit (paid quarterly) which is capped at £7500.
When should I make the claim?
You can make the claim for the first grant on or before 13 July 2020. The scheme has been extended and if you are still eligible you will be able to make a claim for the second and final grant in August 2020 only if your business has been negatively affected after July 14 2020.
The final grant will also be taxable, however it will be 80% of the average monthly earnings capped at £6570 and paid in a single 3 month instalment.
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