On 26 March the Chancellor Rishi Sunak announced his plans to support the self-employed during the COVID-19 pandemic. In some ways it is very similar to the previously announced Job Retention Scheme. The Self-Employment Income Support Scheme allows self-employed workers to claim a taxable grant worth 80% of their trading profits up to a maximum of £2,500 per month for the next three months. However, the money will not be paid into your account until at least 1 June.
Who can apply for the scheme
If you are a member of a partnership or self-employed and:
- Your income Tax Self-Assessment tax return has been submitted for the 2018-19 tax year.
- You have traded in the 2019-20 tax year.
- You would be trading if it was not for the interruption of COVID-19
- You have plans to trade in the 2020-21 tax year.
- You have lost trading/ partnership profits due to the COVID-19 pandemic
Additionally, your trading profits must be less than £50,000, plus you must earn more than half your income through self-employment. If one of the following is true you will be eligible for the scheme:
- “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”
HMRC will use the data from your 2016/17, 2017/18, and 2018/19 Income Tax Self-Assessment tax return. Therefore, if you have not submitted your 2018/19 Income Tax Self-Assessment tax return yet you will need to do so by 23 April 2020 or you will be ineligible for the scheme.
To calculate your monthly amount HMRC will add your total trading profit for the last three tax years and divide by three to calculate your monthly amount.
How to apply
The Scheme is not open yet, HMRC will contact you in due course if you are eligible for the scheme.
For more information visit the government website: https://www.gov.uk/guidance/claim-a-grant-through-the-coronavirus-covid-19-self-employment-income-support-scheme
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