Coronavirus Self-Employment Income Support (COVID-19)
Chancellor Rishi Sunak has unveiled a series of measures which could help business owners who are classed as self-employed.
The measures detailed include:
Those who are classed as self-employed will be able to have 80% of their monthly wages covered by the government
This will be calculated using average monthly profits over the last three financial years and it will apply to those with trading profits of up to £50,000 a year
Support will be capped at £2,500 per month and will initially last for three months but may be extended if required
The scheme will only be open to those who are already classed as self-employed and have filed a self-assessment tax return for 2019
For those who missed the January deadline for filing a self-assessment tax return, you must do this by 23 April 2020 so that you can be eligible for this financial support scheme
The scheme will be operational by June 2020 and HMRC will contact those who are eligible directly and ask them to complete an online form to apply for this assistance
Payments made will be backdated to 1st March 2020
The July deadline for self-assessment has been deferred until January 2021
If you’re a director of your own company and paid through PAYE you may be able to get support using the Coronavirus Job Retention Scheme
WHO CAN APPLY?
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 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:
having trading profits/partnership trading profits in 2018-19 of less than £50,000 and these profits constitute more than half of your total taxable income
having average trading profits in 2016-17, 2017-18, and 2018-19 of less than £50,000 and these profits constitute more than half of your average taxable income in the same period
If you started trading between 2016-19, HMRC will only use those years for which you filed a Self-Assessment tax return.
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.
HOW MUCH YOU’LL GET
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
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.
HOW YOU’LL APPLY
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 now and doing so will only delay the urgent work being undertaken to introduce the scheme.
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.
AFTER YOU’VE APPLIED
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.
THE GOVERNMENT IS ALSO PROVIDING THE FOLLOWING ADDITIONAL HELP FOR THE SELF EMPLOYED: