As you may just have heard, the Government have announced “one of the most significant economic interventions” with a much-needed Self-Employed Income Support Scheme, protecting the nation’s self-employed professionals. The scheme will also apply to members of partnerships, however, as we currently understand, will not apply to limited company directors who receive a dividend.
You can apply for this grant if you are a self-employed individual or a member of a partnership and you:
- have submitted your 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 trading profits must also be less than £50,000 and more than half of your income must be from self-employment. This is determined by at least one of the following conditions being true:
- having trading profits or partnership trading profits in 2018-19 of less than £50,000 or;
- 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 – 2019, HMRC will only use those years for which you filed a Self-Assessment tax return.
IF YOU HAVE NOT SUBMITTED YOUR SELF-ASSESSMENT TAX RETURN FOR THE TAX YEAR 2018-19, YOU MUST DO THIS BY 23 APRIL 2020.
PLEASE CONTACT LIVINGSTONES ACCOUNTANTS ON 020 8903 9538 FOR ASSISTANCE IN GETTING THESE COMPLETED.
HOW MUCH WILL YOU RECEIVE?
Each eligible individual will receive a taxable grant equating to 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 three tax years (where applicable) then divide by 36 (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 and the grants will be paid in a single lump sum, but will not begin to arrive until the start of June at the earliest, with self-employed and freelance taxpayers encouraged to apply for Universal Credit in the meantime.
HOW TO 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.
Payments on account for self-assessment taxpayers due on 31st July 2020 have also been delayed until 31st January 2021.