If you are self-employed or a member of a partnership and have been adversely affected by COVID-19, you may be eligible to claim from the Self-Employment Income Support Scheme.
The scheme will allow you to claim a taxable grant of 80% of your average monthly trading profits, paid out in a single instalment covering 3 months, and capped at £7,500 altogether. This is a temporary scheme, but it may be extended.
If you receive the grant you can continue to work, start a new trade, or take on other employment including voluntary work.
The grant will be subject to income tax and self-employed national insurance.
HMRC will work out if you are eligible, how much grant you will get and be in contact shortly with how to apply. Before this happens, you can follow the steps below to understand how they will do this and what you can do now.
Can I Claim?
You can claim if you are a self-employed individual or a member of a partnership and:
- You traded in the tax year 2018 to 2019 and submitted your Self-Assessment tax return on or before 23 April 2020 for that year.
- You traded in the tax year 2019 to 2020.
- You intend to continue to trade in the tax year 2020 to 2021.
- You carry on a trade which has been adversely affected by coronavirus.
Your business could be adversely affected by coronavirus if, for example:
- You are unable to work because you:
- Are shielding.
- Are self-isolating.
- Are on sick leave because of coronavirus.
- Have caring responsibilities because of coronavirus.
- You have had to scale down or temporarily stop trading because:
- Your supply chain has been interrupted.
- You have fewer or no customers or clients.
- Your staff are unable to come in to work.
How is Eligibility Worked Out?
To work out your eligibility, HMRC will first look at your 2018 to 2019 Self-Assessment tax return. Your trading profits must be no more than £50,000 and at least equal to your non-trading income.
If you are not eligible based on the 2018 to 2019 Self-Assessment tax return, HMRC will then look at the tax years 2016 to 2017, 2017 to 2018, and 2018 to 2019.
Click here to learn more about how HMRC will work out trading profits and non-trading income for the Self-Employment Income Support Scheme.
How Do I Check My Eligibility?
You can use the online tool to find out if you are eligible to make a claim. To do this, you will need your:
- Self-Assessment Unique Taxpayer Reference (UTR) number. If you do not have this, please contact your Client Partner as we should have this on file.
- National Insurance number. If you do not have this, please contact your Client Partner as we should have this on file.
If you would like us to check your eligibility, please get in contact with your Client Partner today and we can arrange this for you.
If you are eligible, HMRC will give you a date, between 13 and 18 May 2020, from which you can apply.
If HMRC have told you that you are not eligible to make a claim, you can ask them to review this after you have used the online tool. If you want to do this later, you will be able to use the online tool more than once.
How Much Will I Get?
If eligible, you will get a taxable grant based on your average trading profit over the 3 tax years:
- 2016 to 2017
- 2017 to 2018
- 2018 to 2019
HMRC will work out your average trading profit by adding together your total trading profits or losses for the 3 tax years, then they will divide by 3.
The grant will be 80% of your average monthly trading profits, paid out in a single installment covering 3 months, and capped at £7,500 altogether.
The grant amount will be paid directly into your bank account, in one installment once approved.
How Can I Apply?
The online service will be available from Wednesday 13 May 2020. If you are eligible, HMRC will tell you the date you can make your claim from. If your claim is approved you will receive your payment within 6 working days.
To watch a video produced by the Government which guides you through the application process, please click here.
What Will I Need To Make A Claim?
To make a claim, you will need your:
- Self-Assessment Unique Taxpayer Reference (UTR) number. If you do not have this, please contact your Client Partner as we should have this on file.
- National Insurance number. If you do not have this, please contact your Client Partner as we should have this on file.
- Government Gateway user ID and password. If you do not have a user ID, you can create one when you check your eligibility online. We encourage you to create this now as it will make applying for the grant quicker and easier when it is your time to apply.
- Bank account number and sort code you want HMRC to pay the grant into (only provide bank account details where a BACS payment can be accepted).
You will have to confirm to HMRC that your business has been adversely affected by coronavirus.
Please note:
- If you claim the grant, HMRC will treat this as confirmation you are below the state aid limits.
- HMRC will check claims and take appropriate action to withhold or recover payments found to be dishonest or inaccurate.
What Happens After I’ve Claimed?
Once you have submitted your claim, you will be told straight away if your grant is approved. HMRC will then pay the grant into your bank account within 6 working days.
You must keep a copy of all records in line with normal self-employment record keeping requirements, including:
- The amount claimed.
- The claim reference number for your records.
- Evidence that your business has been adversely affected by coronavirus.
You will need to report the grant:
- On your Self Assessment tax return.
- As self-employed income for any Universal Credit claims.
- As self-employed income and that you’re working 16 hours a week for any tax credits claims.
What Other Help Can I Get?
If you require other financial support, the following options are available to you.
You can make a claim for Universal Credit while you wait for the grant. The grant may affect the amount of Universal Credit you get, but will not affect claims for earlier periods.
The government is also providing the following help for the self-employed:
- Deferral of Self Assessment Income Tax and VAT payments
- Grants for businesses that pay little or no business rates
- Business Interruption Loan Scheme
- Bounce Back Loan
If you have other employment as a director or employee paid through PAYE your employer may be able to get support using the Coronavirus Job Retention Scheme.