18 Jun 2020
If you’re self-employed or a member of a partnership and your work has been adversely affected by COVID-19, you could be eligible to claim a grant through the UK government’s Self-Employment Income Support Scheme. *UPDATE*:You may be eligible to claim a third grant worth of 80% paid out in a single instalment covering 3 months’ worth of profits, and capped at £7,500 in total. You must make your claim on or before 29 January 2021.
*UPDATE*: You may be eligible to claim a third grant worth of 80% paid out in a single instalment covering 3 months’ worth of profits, and capped at £7,500 in total. You must make your claim on or before 29 January 2021.
You must make a claim for the first grant, which is designed to cover April, May and June’s income, by 13 July 2020. Chancellor Rishi Sunak has also announced an extension of the scheme which will enable those whose work has been affected on or after 14 July to apply for a second and final instalment in August.
The scheme’s first iteration allows you to claim a taxable grant worth 80% of your average monthly trading profits. The single instalment covers 3 months’ worth of profits and is capped at £7,500. The amount you receive will depend on your average trading profit over the last 3 tax years. If you’re eligible for the second instalment in August you’ll receive 70% of your average monthly trading profits (capped at £6,570).
Again, the second grant is paid in one instalment to cover 3 months. You can claim the second grant regardless of whether or not you received the first one, and vice versa.
You can continue to work, start a new trade or undertake voluntary work if you receive the grant. Unlike a loan, you won’t have to repay the amount but you’ll have to pay Income Tax and Self-Employed National Insurance on it.
Bear in mind that you’ll have to apply for the grant yourself – if your tax agent or adviser does it on your behalf a fraud alert will be triggered.
If you’re self-employed or in a partnership you can claim a Self-Employed Income Support grant, as long as the following apply:
You traded in the 2018/19 tax year and submitted your tax return before or on 23 April 2020
You traded in the 2019/20 tax year and intend to carry on doing so
Your trade has been negatively impacted by COVID-19
Your trade may have been negatively or “adversely” affected if you’ve been unable to work because you’re shielding, self-isolating or on sick leave because of the coronavirus. Or perhaps you’ve had to reduce or stop trading altogether because of a disruption to your supply chain, a reduction in customers/ clients or a lack of staff.
For instance, a self-employed person working in the film industry who was unable to work from March to September would be eligible for both grants. An electrician who couldn’t work from March to May due to government restrictions but could resume work on a building site in June through September would be able to claim for the first grant.
For more information on eligibility, including how different circumstances can affect the scheme, visit the government’s website. You’ll need your Self-Assessment Unique Taxpayer Reference (UTR) number to hand as well as your National Insurance number.
You can start your Self-Employed Income Support Scheme claim through the government’s website too. Your UTR is the first thing you’ll be asked for.
If you’re not eligible for the income support scheme there are other support measures available. You might be able to apply for Universal Credit and can access it to tide you over while you wait for your grant to come through.
The following government measures are also designed to help self-employed workers whose work has been adversely affected by the coronavirus:
Self Assessment Income Tax & VAT payment referrals
Grants for businesses paying little or no business rates
Although we can only provide information on some government schemes like the Self Employed Income Support Scheme, Funding Options has been chosen by the government-owned British Business Bank to help businesses find finance when they’re unsuccessful with the major banks. You can use the Funding Options platform to find a CBILS lender.
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