Self-employed people are the latest group of workers to be given income support by the Government to help them through the coronavirus crisis.
The Self-Employed Income Support Scheme came as welcome news for millions of people who had previously felt left out by Chancellor Rishi Sunak’s measures to support firms and their employees.
However, not all sole workers will benefit from this scheme. Read on to find out if you can get help. For any further assistance, speak to a member of our team today.
Who Is Eligible?
You are eligible if you are 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 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.
Trading Start Date
If you started trading between 2016 and 2019, HMRC will only use those years for which you filed a Self-Assessment tax return.
If you have not submitted your Income Tax Self-Assessment tax return for the tax year 2018-19, you must do this by April 23, 2020 to qualify for this support scheme. If you require a fast-tracked tax return, our team can help. Contact us, here.
HMRC will use data on 2018-19 returns already submitted to identify those eligible and will risk assess any late returns filed before the April 23 deadline in the usual way.
How Much Will I Get If Eligible?
You will get a taxable grant which will be 80 per cent of the average profits from the tax years (where applicable):
To work out the average, HMRC will add together the total trading profit for the three tax years (where applicable) then divide by three (where applicable) and use this to calculate a monthly amount.
It will be up to a maximum of £2,500 per month for three months.
HMRC will pay the grant directly into your bank account, in one instalment.
Do I Need To Apply?
HMRC will automatically check to see if you are eligible, calculate any grant due and pay this amount into your account during June 2020.
What If I Don’t Qualify?
Those self-employed who do not qualify will need to apply for Universal Credit or one of the other business interruption loans on offer. Benefits have been increased and the self-employed are now able to claim.
There may be other options that you could adopt, although much will depend on your individual circumstances.
You can find out more about the raft of support measures in our dedicated coronavirus section, here.