COVID-19 Information for Self Employed

COVID-19 Information for Self Employed

If you are self-employed you can claim a grant through the coronavirus (COVID-19) Self-employment Income Support Scheme

This scheme is for the self-employed or a member of a partnership in the UK and have lost income due to coronavirus (COVID-19).

The online service you’ll use to claim is not available yet. HMRC will aim to contact you by mid May 2020, and will make payments by early June 2020.

This scheme will allow you to claim a taxable grant worth 80% of your trading profits up to a maximum of £2,500 a month. It will be available for 3 months, but may be extended.

The grant will be subject to Income Tax and National Insurance contributions but does not need to be repaid.

You can make a claim for Universal Credit while you wait for the grant. You should record the grant as part of your self-employment income, and it may affect the amount of Universal Credit you get. This will not affect Universal Credit claims for earlier periods.

If you receive the grant you can continue to work or take on other employment including voluntary work.

If you have other employment as a director or employee paid through PAYE your employer may be able to get support using the Job Retention Scheme.

Who can claim?

You can claim 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 to 2019
  • traded in the tax year 2019 to 2020
  • are trading when you apply, or would be except for coronavirus
  • intend to continue to trade in the tax year 2020 to 2021
  • have lost trading profits due to coronavirus

You will need to confirm to HMRC that your business has been adversely affected by coronavirus. HMRC will as usual use a risk based approach to compliance.

Your trading profits must also be no more than £50,000 and more than half of your total income for either:

  • the tax year 2018 to 2019
  • the average of the tax years 2016 to 2017, 2017 to 2018, and 2018 to 2019

If you have not submitted Self-Assessment tax returns for all 3 years find out how the government will work out your eligibility

If you have not submitted your Self-Assessment tax return for the tax year 2018 to 2019, you must do this by 23 April 2020 or you will not be able to claim. HMRC will review any late returns in the usual way

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

To work out the average trading profit we will add together your total trading profits or losses for the 3 tax years then divide by 3.

If you have not submitted Self-Assessment tax returns for all 3 years

The government will work out your average trading profit based on continuous periods of self-employment, which will be either:

  • the tax years 2017 to 2018 and 2018 to 2019
  • the tax year 2018 to 2019 only, even if you were self-employed in the tax year 2016 to 2017

The grant will be 80% of your average trading profit, divided by 12 which will give a monthly amount. We will pay this or up to a maximum of £2,500 a month, whichever is lower.

The government will pay the grant directly into your bank account, in one instalment.

How to claim

You cannot make a claim yet.

HMRC will aim to contact you by mid-May 2020 if you’re eligible for the scheme and invite you to claim using the GOV.UK online service.

If you’re unable to claim online an alternative way to claim will be available via GOV.UK.

This GOV.UK page will also be updated with the steps you can take to make it easier to claim using the GOV.UK online service.

Q. As a director of a company I am now be designated as furlough as no other support available. I need a clear list of duties we can perform for our business whilst furloughed, e.g. can we pay staff wages?

A. Company directors are eligible to be furloughed and receive support through this scheme The Companies Act 2006 states that a Director owes statutory duties to the company and is still allowed to perform these duties even whilst on furlough.

Statutory duties include:

  • Promoting the success of the company
  • Avoiding conflicts of interest 
  • Protect the well being of the company

The duties must not must not generate any income for the company or provide a on or on behalf of the company. The Government states the activity any director engages in must ‘do no more than would be judged reasonably necessary for the purposes’ of fulfilling their statutory duties.

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