How to claim a grant through the Self-Employment Income Support Scheme

If you’re self-employed or a member of a partnership and have been adversely affected by coronavirus (COVID-19) you may be able to claim a grant under the Self-Employment Income Support Scheme. Under the rules of the scheme not every self-employed person will be able to claim and lots of people will be disappointed. For example, if you are over 65 and receiving a pension (either state or personal) you may well be ineligible. HMRC says “This is a very challenging time and some people may be disappointed if they are not eligible.” Well they got that right!

Added to which the scheme rules are complex but nevertheless HMRC is not allowing tax agents to make claims on behalf of their clients even though the majority of self-employed people will need help.

The scheme will allow you to claim a taxable grant of 80% of your average monthly trading profits, paid out in a single instalment covering 3 months, and capped at £7,500 altogether. This is a temporary scheme, but it may be extended. If you receive the grant you can continue to work, start a new trade or take on other employment.

The grant will be subject to Income Tax and self-employed National Insurance and HMRC will work out if you’re eligible and how much grant you may get.

You can follow these steps to help you understand how they will do this and what you can do now:

 Who can claim

You can claim if you’re a self-employed individual or a member of a partnership and:

  • you carry on a trade which has been adversely affected by coronavirus
  • you traded in the tax year 2018 to 2019 and submitted your Self-Assessment tax return on or before 23 April 2020 for that year
  • you traded in the tax year 2019 to 2020
  • you intend to continue to trade in the tax year 2020 to 2021

Your business could be adversely affected by coronavirus, for example if:

  • you’re unable to work because you:
  • are shielding
  • are self-isolating
  • are on sick leave because of coronavirus
  • have caring responsibilities because of coronavirus
  • you’ve had to scale down or temporarily stop trading because:
  • your supply chain has been interrupted
  • you have fewer or no customers or clients
  • your staff are unable to come in to work

To work out your eligibility HMRC will first look at your 2018 to 2019 Self Assessment tax return. Your trading profits must be no more than £50,000 and at least equal to your non-trading income. If you’re not eligible based on the 2018 to 2019 Self Assessment tax return, HMRC will then look at the tax years 2016 to 2017, 2017 to 2018, and 2018 to 2019.

Find out how HMRC will work out your eligibility including if HMRC have to use other years.

As your tax agent I cannot make the claim for you. You must make the claim yourself so contact me if you need any help or support.

Check if you’re eligible to claim

You can use HMRC’s online tool to find out if you’re eligible to make a claim and your tax agent or adviser can also use the online tool on your behalf.

You’ll need your:

If you’re eligible HMRC will tell you the date from which you’ll be able to make a claim and ask you to add your contact details. HMRC will use these to remind you when the online service will be available. If you’re not eligible to make a claim, you can ask HMRC to review this after you’ve used the online tool.

How much you’ll get

You’ll get a taxable grant based on your average trading profit over the 3 tax years:

  • 2016 to 2017
  • 2017 to 2018
  • 2018 to 2019

HMRC will work out your average trading profit by adding together your total trading profits or losses for the 3 tax years, then HMRC will divide by 3.

The grant will be 80% of your average monthly trading profits, paid out in a single instalment covering 3 months, and capped at £7,500 altogether. The online service will tell you how HMRC have worked the grant out.

The grant amount HMRC work out for you will be paid directly into your bank account, in one instalment.

Find out how HMRC will work out your average trading profits including if you have not traded for all 3 years.

How to claim

The online service you’ll use to claim is not available yet. HMRC will aim to contact you by mid-May 2020 if you’re eligible, to invite you to claim using the GOV.UK online service. Payment will be made by early June 2020 if your claim is approved.

If you’re unable to claim online an alternative way to claim will be available. HMRC will update this page with more information soon.

If you receive texts, calls or emails claiming to be from HMRC, offering financial help or a tax refund and asking you to click on a link or to give personal information, it is a scam. You should email it to phishing@hmrc.gov.uk and then delete it.

When you make your claim

You’ll  need your:

You’ll have to confirm to HMRC that your business has been adversely affected by coronavirus and if you claim the grant HMRC will treat this as confirmation you’re below the state aid limits.

HMRC will check claims and take appropriate action to withhold or recover payments found to be dishonest or inaccurate.

After you’ve claimed

Once you’ve submitted your claim, you will be told straight away if your grant is approved. HMRC will pay the grant into your bank account within 6 working days.

You must keep a copy of all records in line with normal self-employment record keeping requirements, including:

  • the amount claimed
  • the claim reference number for your records
  • evidence that your business has been adversely affected by coronavirus

You will need to report the grant:

  • on your Self Assessment tax return
  • as self-employed income for any Universal Credit claims
  • as self-employed income and that you’re working 16 hours a week for any tax credits claims

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