Coronavirus Self-employment Income Support Scheme

Earlier this evening the chancellor announced the much awaited government scheme to support the self-employed.

Some Self-employed workers, who meet the criteria set out by the scheme, can apply for a taxable grant worth 80% of their average monthly profits to help them cope with the financial impact of coronavirus.

You cannot apply for the grant yet.

HMRC urge individuals not to contact them now and say doing so will only delay the urgent work being undertaken to introduce the scheme.

HMRC will contact you if you are eligible for the scheme and invite you to apply online.

Eligibility

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

What you will receive

The taxable grant will be 80% of the average profits from the last three tax years.

If you started trading between 2016-19, HMRC will only use those years for which you filed a Self-Assessment tax return.

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 say the grant will be paid directly into your bank account, in one instalment.

Read more about it on the government website here