This scheme is for the self-employed or members of a partnership that have lost income due to coronavirus.
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.
Who is Eligible
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
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.
Your self-employed trading profits must also be less than £50,000 and more than half of your income comes from self-employment.
If either of the following conditions are satisfied you will be deemed to have a trading profit under the £50,000 limit:
• Your trading profit/partnership trading profits in 18/19 were less than £50,000 and these constituted more than half of your total taxable income
• Your average trading profits in 16/17, 17/18 and 18/19 are less than £50,000 and these profits constitute more than half of your average taxable income in those periods.
It should be noted that Directors (owner/managers) of Ltd companies are not covered by this scheme but may be eligible for support under the Job Retention Scheme if they have received payment through PAYE.
How is the grant calculated
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
It will be up to a maximum of £2,500 per month for 3 months.
The period is backdated to 1 March until 31 May 2020. Payment of grant is directly into your bank account, in one instalment, likely sometime June.
This calculation will be made by HMRC.
If you would like us to calculate the amount that you can anticipate please get in touch.
How to apply
You cannot apply for this scheme.
HMRC will contact you if you are eligible for the scheme and invite you to apply online.
Individuals should not contact HMRC.
Unlike the employee job retention scheme, the self employed can continue to work as they receive support but are advised to strictly follow the government guidelines to only leave your house if absolutely necessary, and take the appropriate precautions with social distancing.
Taxable grant means it will be declared as income on 2021 tax returns.
This scheme does not cover individuals who commenced a self employed business on or after 6 April 2019. If you find yourself in this situation you can claim for Universal Credit (applications to be made online at https://www.gov.uk/universal-credit/how-to-claim ), if you have a rateable business premises you may still be entitled to the Coronavirus grant from your local council and you may have access to the Coronavirus Business Interruption Loan Scheme.
As per last week, remember that, if you had a payment on account to make by 31 July 2020 it has been deferred until January 2021. Similarly VAT payments for this coming quarter are deferred until the end of the tax year (5 April 2021 at the latest).