COVID-19 Support for the Self Employed

Following the announcement on 26 March 2020 by the Chancellor of the Exchequer, we are able to set out details of the Government’s proposed support scheme for the Self Employed.

We would ask you to read this guidance carefully as not all self employed workers will be eligible for the grant, and as of today there are no further provisions or details beyond what was announced yesterday.

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
  • If you have still not filed your 2018/19 return, you have until 26 April 2020 to make this filing or you will be unable to claim.
  • The grant will pay in a single lump sum, 3 months of 80% of your average trading profits over the three tax years 2016/17, 2017/18 and 2018/19 to a limit of £2,500 per month. A maximum claim of £7,500.
  • The grant will be treated as taxable income.

How to claim

  • HMRC will contact you directly based on the information they hold to identify who is eligible and will invite applications.
  • The application will require you to confirm that you meet the eligibility criteria.
  • It will be paid direct into your bank account that you will need to confirm in the application.

Do not contact HMRC now, if you are eligible HMRC will contact you directly.  Please note, there is no other way of accessing this grant other than direct contact from HMRC.

Exclusions

  • Those earning more than £50,000 (or a 3 year average of more than £50,000)
  • Those who have not filed a 2018/19 tax return after 26 April 2020.
  • Those who have been self employed for less than 3 years
  • Those who ceased self employment in 2018/19 or 2019/20 (if you became employed, for example)
  • Directors of owner/managed companies (as these are not classed as self employed)
  • Those receiving  dividend or property rental income (as these are not classed as self employed)

Full details

The full details of the announcement can be accessed by following the link below;

https://www.gov.uk/guidance/claim-a-grant-through-the-coronavirus-covid-19-self-employment-income-support-scheme

As more details become available in the coming weeks we will continue to issue fresh guidance, but for now we would encourage you to wait for the contact from HMRC.

Stay safe and we will be in touch with further updates on the full range of Government support as they come available.