Government support for the self employed and partners in a trading business

You can apply if you’re 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 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 and 2019, 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 you’ll get

You’ll get a taxable grant which will be 80% of the average profits from the tax years (where applicable): 2016-17, 2017-18 and 2018-19

To work out the average HMRC will add together the total trading profit for the 3 tax years (where applicable) then divide by the number of years, and use this to calculate a monthly amount.

It will be up to a maximum of £2,500 per month for 3 months.

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

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.

When available, 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.

After you’ve applied

Once HMRC has received your claim and you are eligible for the grant, they 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.

When will you receive your Grant?

The Government have stated that you will not receive your grant until June.

Other help you can get

Due to the long delay in receiving your grant it is important that you maintain your liquidity as best you can and seek other options, if that is necessary.
The government has the following additional help for the self-employed:

  • Deferral of self assessment income tax payments, which were due in July until 31 January 2021.
  • Deferral of VAT payments from 20 March until 30 June.
  • Grants for businesses that pay little or no business rates as a result of the small business rate relief.
  • Access to Universal Credits
  • Business Interruption loan scheme

We would also recommend that you contact HMRC to set in place time to pay arrangements and contact your bank and other financers to request a payment holiday.  You may also seek to negotiate delayed payment terms with landlords and your suppliers.
If any of the Banks Sheridan team can help further, please contact us.