The government have announced the help they are providing in the Coronavirus pandemic for the self employed via a new Self Employment Support Scheme.
What will I get if I am eligible?
A taxable grant 80% of your average profits from your 2016-17, 2017-18 and 2018-19 tax returns up to a maximum of £2,500 per month. The scheme will be open for an initial 3 months and first claims will be able to be made by the beginning of June.
What is the eligibility criteria?
You must meet all of the following criteria:
- be self-employed or a member of partnership;
- Have lost trading/partnership trading profits due to COVID-19;
- Filed a tax return for 2018-19 as self-employed or a member of a trading partnership. Those who have not yet filed for 2018-19 will have an additional 4 weeks from this announcement to do so;
- Have traded in 2019-20; be currently trading at the point of application (or would be except for COVID 19) and intend to continue to trade in the tax year 2020 to 2021
- Have trading profits of less than £50,000 and more than half of your total income come from self-employment. This can be with reference to at least one of the following conditions:
- Your trading profits and total income in 2018/19, if you have only been self employed since April 18
- Your average trading profits and total income across up to the three years between 2016-17, 2017-18, and 2018-19.
If you became self employees during the 2019-20 tax year, you do not qualify.
How and when do I get the grant?
You do not need to do anything now. HMRC will use existing information to check potential eligibility and contact you to apply for the scheme. In the application, it sounds like they will ask a few eligibility questions as above. It is expected that the grants will start being paid at the beginning of June.
Will I need my income details?
HMRC should already have this information but if you do need it, previous tax returns can be accessed via our previous client portal here: www.irisopenspace.co.uk
What can I do in the meantime?
You can access Universal Credit; details are here: https://www.gov.uk/apply-universal-credit or the business continuity loan scheme via your bank.
What about company directors?
It would appear that this scheme does not apply to company directors and it is not clear if the job retention scheme applies to company directors either as technically, you can’t make your self redundant as a company must have at least one director. Therefore at the moment, you would need to apply for the business interruption loan scheme, defer VAT and tax bills, where you pay business rates or receive the small business rates relief you will get a grant, ask for a mortgage payment holiday or claim universal credit.
Like all these schemes, we are still awaiting the final small print and have no further information than has been publicly announced, but it looks fairly straightforward.
If you have any questions about this, or any other help available, please get in touch