Following the recent announcements from the Chancellor, HM Revenue & Customs have issued updated guidance on the support available to the self-employed.

If you are self-employed or a partner in a partnership, then you need to check your eligibility by following this link:

https://www.tax.service.gov.uk/self-employment-support/enter-unique-taxpayer-reference

When you enter the HM Revenue & Customs page, you will need the following information:

Your UTR Number:
Your NI Number:

The tool will tell you if you are eligible or not. If you are eligible, you will need to enter your Government Gateway that you use for your tax return and national insurance record. You also be given the earliest date upon which you can make your application.

Once you enter the Gateway, it will ask for your email and telephone number to which they will send the link for the claim form.

NOTE: If you do not have a Government Gateway, you can set one up at this point. You should do that now to save time next week. You will need to save these login and password details for future use.

Fraudsters & Scammers

Please be very wary of fraudsters and scammers. HM Revenue & Customs will only write to you, they will not call you or send you emails or text, no matter how convincing they may be.

What Could You Get?

If you are eligible, you could get up to 80% of you average monthly profits covering 3 months and paid in a single instalment in June. The payment is capped at £7,500 and we outline more details about the scheme below.

HM Revenue & Customs Reference:

https://www.gov.uk/guidance/claim-a-grant-through-the-coronavirus-covid-19-self-employment-income-support-scheme

The Relief Available

The scheme will enable you to claim a “taxable and NICable” grant worth up to 80% of your trading profits up to a maximum of £2,500 per month for March, April and May and will be paid into your bank account in June in a single instalment.

This grant does not have to be repaid, you only pay tax and national insurance on the amount you received and that will be included in your 2020/21 tax return.

Who is Eligible?

The scheme is only available to those who are self-employed or are partners in a partnership (which is classed as self-employment) and that:

  • You have submitted your 2018/19 tax return – if not, you must do so before 23rd April 2020;
  • You have traded in the tax year 2019/20;
  • You are trading or were trading but could not because of Covid-19;
  • You lost trading profits because of Covid-19.

Unfortunately, this excludes all those small businesses operating through a limited company. It also excludes those who have just started self-employment during 2019/20, as there is no basis on which the HM Revenue & Customs can assess their eligibility.

Other Criteria

The scheme is aimed at those businesses who have trading profits of less than £50,000 and where more than half your income arises from your self-employment. You need to satisfy one of the two conditions below:

  1. That your 2018/19 trading profits are less than £50,000 and those profits constitute more than 50% of your taxable income; or
  2. Your average trading profits during 2016/17, 2017/18 & 2018/19 are less than £50,000 and that during that period, the average self-employed income is more than 50% of your average taxable income.

Eg Steve – Painter/Decorator
Steve left employment to start his self-employed business and his profits and salary in the last three years were:

Year                             S/E Profits                   Other  

2016/17                      £15,000                 £20,000

2017/18                     £25,000                 £15,000

2018/19                     £35,000                 £5,000

Total                         £75,000                £40,000

Average profits in the period £75,000 / 3 = £25,000

Average taxable income (£75,000+£40,000) / 3 = £34,500

Steve’s average self-employed profits were less than £50,000 and were more than 50% of his total average taxable income, therefore, he is eligible for the scheme.

HM Revenue & Customs have provided further examples of how the payment will be calculated:

https://www.gov.uk/guidance/how-hmrc-works-out-total-income-and-trading-profits-for-the-self-employment-income-support-scheme

How to Apply

I have detailed the application process above. Also, please be aware that nobody else can apply on your behalf, so be aware of Fraudsters and Scammers. They are looking for their next victim, don’t become one of their victims. If you have any concerns, either call us or refer them to us.

When to Expect the Money

It is expected that the payments will be made sometime in June 2020.

Other matters

Details of these measures are available here:
If your self-employed business has employees and  / or business property, there are further reliefs available, which we have detailed here

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