The Gov has released official details on eligibility and guidelines of the Self-Employment Income Support Scheme to support the Self-employed during the Covid-19 pandemic.
Please use this post as a guide and refer to any links throughout, or at the end of, this guide. Note that the information contained in this guide is taken from the Gov website, guidelines and/or as advised by them. We can’t generally advise on everyone’s circumstances as each case will be treated differently – if you have any specific questions just get in touch!
We will update this page as regularly as new information is published.
Last updated: 4th April 2020
Who is eligible?
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 not submitted your Income Tax Self-Assessment tax return for the tax year 2018-19, you must do this by 23 April 2020.
HMRC will use data on 2018-19 returns already submitted to identify those eligible and will risk assess any late returns filed before the 23 April 2020 deadline in the usual way.
How much can I get?
You’ll get a taxable grant which will be 80% of the average profits from the tax years (where applicable):
- 2016 to 2017
- 2017 to 2018
- 2018 to 2019
To work out the average HMRC will add together the total trading profit for the 3 tax years (where applicable) then divide by 3 (where applicable), and use this to calculate a monthly amount.
It will be up to a maximum of £2,500 per month for 3 months.
HMRC will pay the grant directly into your bank account, in one instalment.
How do I apply?
You cannot apply for this scheme yet.
HMRC will contact you if you are eligible for the scheme and invite you to apply online.
Individuals do not need to contact HMRC now and doing so will only delay the urgent work being undertaken to introduce the scheme.
You will access this scheme only through GOV.UK. If someone texts, calls or emails claiming to be from HMRC, saying that you can claim financial help or are owed a tax refund, 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.
What happens after I apply?
Once HMRC has received your claim and you are eligible for the grant, we will contact you to tell you how much you will get and the payment details.
If you claim tax credits you’ll need to include the grant in your claim as income.
What other help can I get?
The government is also providing the following additional help for the self-employed:
- deferral of Self Assessment income tax payments due in July 2020 and VAT payments due from 20 March 2020 until 30 June 2020
- grants for businesses that pay little or no business rates
- increased amounts of Universal Credit
- Business Interruption Loan Scheme
If you’re a director of your own company and paid through PAYE you may be able to get support using the Job Retention Scheme.
We would also advise you to speak with your Credit Card and mortgage lenders to try to defer payments for a few months – always worth a try!
Frequently Asked Questions
Question not listed? Leave a comment or get in touch!
Unfortunately, as far as we understand, dividends are not taken into account to work out your grant – it will only be payable on Self-Employment income. However, they do count towards working out your eligibility – if most of your income comes from dividends and you exceed the 50% threshold, you are unlikely to qualify for this scheme.
The grant is calculated using your profits after deducing expenses – so your overall Self-Employment profits before paying taxes.
It’s a grant, so doesn’t have to be paid back. But it is also taxable income so it will be classified as taxable income on your next Self-Assessment.
Simple answer, yes if you qualify for both. But it depends on your circumstances.
There hasn’t been a formal date announced yet but the Gov estimates payments to be made in June.