In response to the pandemic outbreak of COVID-19, the government has introduced a self-employed income support scheme to assist those who are self-employed or a member of a partnership and have lost income due to coronavirus.
What will the scheme provide?
This scheme will allow those who are self-employed to claim a taxable grant worth 80% of their trading profits up to a maximum of £2,500 per month for a 3 month period from 1 March 2020.
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 have been less than £50,000 in 2018-19, or you must have an average trading profit of less than £50,000 from 2016-17, 2017-18 and 2017-18; and
– more than half of your income must come from self-employment.
– If you pay yourself a salary and dividends through your own company, you won’t be covered by the scheme. However, you may be able to apply for the Coronavirus Job Retention Scheme if you are operating through PAYE.
How will the grant be calculated and paid?
HMRC will calculate the individual’s grant using the average of their trading profits from their tax returns for the last three years (2016-2017, 2017-2018 and 2018-2019). 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.
If you started trading between 2016-19, HMRC will only use those years for which you filed a Self-Assessment tax return.
The grant will be paid as a single lump sum covering March to May inclusive.
What happens next?
Unfortunately, you cannot currently apply for this scheme. Individuals will be contacted by HMRC if they are considered to be eligible to apply for this scheme online.
HMRC hopes to start to pay the grants at the beginning of June. Further details of the scheme are expected to be provided by HMRC shortly.
If you would like further information relating to the above, please contact email@example.com.