Self-Employment Income Support Scheme

Updated: 05th May 2020

The self-employment income support scheme which has been put in place by the government to help people who are either self-employed or members in partnerships whose income have been affected by COVID-19.

Who can apply?

You are eligible for the grant if you are self-employed or a member of a partnership and meet the following criteria:

  • Have submitted a tax return for the 18/19 tax year
  • Have traded in the 19/20 tax year
  • You are trading when you apply (or should have been except for COVID-19)
  • You intend to continue trade in the 20/21 tax year
  • Your trading profits must be no more than £50,000 and more than half your total income

Please note that you will have to confirm with HMRC that your business has been adversely affected as a result of COVID-19.

How much will you receive?

You can claim 80% of your trading profits up to £2,500 per month – the government has made the claim available for up to 3 months from 26th March 2020, but this may be extended.

Please note that the grant does not need to be repaid, but it will be subject to Income Tax and National Insurance Contributions.

How will they calculate how much you are due?

HMRC will calculate how much you are eligible for based on either:

  • The average trading profits for the past 3 tax years (16/17, 17/18 and 18/19) OR,
  • If you have not been trading or submitted tax returns for the past 3 years, they will calculate it based on either an average of your trading profits for 17/18 and 18/19 OR just 18/19.

The way HMRC will calculate your grant is based on the tax returns that you have submitted in the past 3 years, so if you have submitted one every year since tax year 16/17, then they will take the average of the past 3, but if you have only submitted a tax return in 18/19, then they will use this figure.

How to claim:

HMRC are expecting to have contacted everyone eligible via letter by mid-May. The online service through your government gateway login will be available from 13 May 2020. If you haven’t got a government gateway login, we advise that you set one up at your earliest convenience to ensure a smoother process of applying.

What you’ll need making the claim:

  • Self Assessment UTR
  • National Insurance number
  • Government Gateway user ID and password – if you do not have a user ID, you can create one when you check your eligibility online
  • Bank account number and sort code you want HMRC to pay the grant into (only provide bank account details where a Bacs payment can be accepted)

You’ll have to confirm to HMRC that your business has been adversely affected by coronavirus.

Check to see if you are eligible here: www.bit.ly/3fkMZwJ

After you’ve claimed

Once you’ve submitted your claim, you will be told straight away if your grant is approved. The grant will be paid into your bank account within 6 working days.

HMRC will check claims and take appropriate action to withhold or recover payments found to be dishonest or inaccurate.

You must keep a copy of all records in line with normal self-employment record keeping requirements, including:

  • The amount claimed
  • The claim reference number for your records
  • Evidence that your business has been adversely affected by coronavirus

You will need to report the grant:

  • On your Self Assessment tax return
  • As self-employed income for any Universal Credit claims
  • As self-employed income and that you’re working 16 hours a week for any tax credits claims

Other important information:

  • You can still apply for universal credit whilst waiting for this grant, however, when you receive the grant, this may affect the level of Universal Credit you are eligible for afterwards.
  • If you receive the grant, you are still allowed to take on work or do voluntary work if you choose to.
  • If you haven’t already got a government gateway log in, you can click on the following link and register for one just by following the steps: www.gov.uk/log-in-register-hmrc-online-services

If you have any other questions, please do not hesitate to contact the team on enquiries@blowabbott.com or 01472 694569.

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