Self-Employment Income Support Scheme
This scheme is available to the self-employed, including members of a partnership, if income has been lost due to coronavirus. You will need to confirm to HMRC that your business has been adversely affected by Coronavirus in order to claim. Your self-employed trading profits must be no more than £50,000 and at least equal to your non-trading income.
There are four grants available under the Self-Employment Income Support Scheme, the first grant covers the period March to May 2020, the second covers the period June to August 2020. The third will cover the period November 2020 to January 2021 and the fourth and final grant covers the period February 2021 to April 2021.
Grant 1 – covering the period March to May 2020 – NOW CLOSED
Grant 1 provides a taxable grant of up to 80% of average monthly trading profits, paid out in a single instalment covering 3 months, and capped at £7,500 altogether. You can continue to work while receiving this grant. The grant will be subject to Income Tax and self-employed National Insurance. Online grant claims opened on 13 May 2020 and the closing date for claims covering the period March to May was 13 July 2020.
Grant 2 – covering the period June to August 2020 – NOW CLOSED
Grant 2 provides a taxable grant to those whose trade continues to be, or is newly, adversely affected by COVID-19. To be eligible, you will need to confirm that your business has been adversely affected by Coronavirus on or after 14 July 2020. The grant will be calculated based on 70% of average monthly trading profits, paid out in a single instalment covering 3 months, and capped at £6,570 altogether. You can continue to work while receiving this grant. The grant will be subject to Income Tax and self-employed National Insurance. Online grant claims opened on 17 August and will close on 19 October 2020. Claims can be made using the following link: https://www.tax.service.gov.uk/self-employment-support/enter-unique-taxpayer-reference.
Grant 3 – covering the period November 2020 to January 2021 - NOW CLOSED
Grant 3 provides a taxable grant of 80% of average monthly trading profits, capped at £7,500. The level of this grant was originally set at 40% but has gradually increased as the health restrictions in the UK have changed. The claims window will open on 30 November 2020 and will close on 29 January 2021.
In order to claim, you must reasonably believe that you will suffer a significant reduction in trading profits due to reduced business activity, capacity or demand or inability to trade due to coronavirus during the period 1 November to 29 January 2021. You must keep evidence that shows how your business has been impacted by coronavirus resulting in less business activity than otherwise expected.’
Grant 4 – covering the period February 2021 to April 2021 - NOW CLOSED
Grant 4 provides a taxable grant calculated at 80% of three month’s average trading profits, capped at £7,500. This will cover the period February to April 2021. Claims closed on 1 June 2021.
Eligibility criteria for the grant:
You can claim if you’re self-employed and you:
- have submitted your 2018/19 tax return on or before 23 April 2020
- traded in the tax year 2019/20
- carry on a trade which has been adversely affected by coronavirus
- intend to continue trading in 2020/21
Examples of a business adversely affected by coronavirus are if you are unable to work as you are shielding, self-isolating, on sick leave due to coronavirus or have caring responsibilities because of coronavirus. Also, if you have had to scale down or temporarily stop trading because your supply chain has been interrupted, you have fewer or no customers or clients and/or your staff are unable to come in to work.
You should not claim the grant if you’re above the state aid limits or operating trade through a trust.
HMRC will look at your 2018 to 2019 self-assessment tax return to determine whether you are eligible. If you’re not eligible based on the 2018/2019 tax return then HMRC will look at the years 2016/17, 2017/18 and 2018/19. Trading profits will be calculated using an average of the previous 3 tax years’ taxable profits (ie. after capital allowances). For farmers claiming farmers’ averaging relief HMRC will use the amount of profit before the averaging claim to work out if you are eligible and how much you will receive.
For the grants covering the period March to May 2020, HMRC have contacted eligible individuals, using 2018-19 tax returns, along with an invitation to apply online for the scheme. To claim you will need your Self-Assessment UTR, your National Insurance number, your Government Gateway user ID and password and the bank account number and sort code you want the grant to be paid in to. Once an application has been submitted HMRC will inform you immediately if your grant is approved and the grant will be paid into your bank within 6 working days. Your tax agent cannot make this claim on your behalf. This grant will need to be reported on your Self Assessment tax return, as self-employed income for Universal Credits and as self-employed income for tax credits.
The link to the Government guidance on this scheme is here: https://www.gov.uk/guidance/claim-a-grant-through-the-coronavirus-covid-19-self-employment-income-support-scheme.
HMRC have also made available an online tool to find out if you’re eligible to make a claim: https://www.tax.service.gov.uk/self-employment-support/enter-unique-taxpayer-reference.
