The Chancellor has announced a new Self-Employed Income Support Scheme for self-employed people who have been adversely affected by Covid-19. Here, Nottingham chartered accountants Clayton & Brewill provides an overview of the new scheme.
The government will pay self-employed workers a taxable grant worth 80% of their average monthly trading profit over the last three years, up to £2,500 per month for at least three months (in line with the employed scheme), as part of the newly announced Self-Employed Income Support Scheme.
Who will the scheme apply to?
According to government guidance, a self-employed individual or a member of a partnership can apply for the scheme providing they meet the following criteria:
- Have submitted an Income Tax Self-Assessment tax return for the tax year 2018-19. Those who have not submitted an Income Tax Self-Assessment tax return for the tax year 2018-19 must do so by 23 April 2020.
- Have traded in the tax year 2019-20. However, the scheme will not apply to anyone who started trading in 2019/20, for instance, those that have started a new business in the last 12 months.
- Are trading when they apply, or would be except for COVID-19, and intend to continue to trade in the tax year 2020-21
- Have lost trading/partnership trading profits due to COVID-19
- Have trading profits of less than £50,000 with more than 50% total income coming from self-employment. This can be with reference to at least one of the following conditions:
- Trading profits and total income in 2018/19
- Average trading profits and total income across up to the three years between 2016-17, 2017-18, and 2018-19
Those who trade through a limited company and pay themselves a salary and dividends are not covered, but could be covered for their salary by the Coronavirus Job Retention Scheme if they are operating PAYE schemes.
How do you apply?
HMRC will contact you if you are eligible for the scheme and invite you to apply online; you do not need to contact them for the time being. The scheme will only be accessed through GOV.UK. If someone texts, calls or emails claiming to be from HMRC 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.
More information on the Self-Employed Income Support Scheme can be found here.
If you have any questions or need advice on how to pro-actively manage the impact of COVID-19 on your business, please do not hesitate to contact a member of our team, and we will be happy to provide additional guidance.