Coronavirus Financial Support for Self Employed

On 26 March the UK Government announced financial support for individuals who are self-employed and have been negatively affected by COVID-19.

Self Employment Income Support Scheme

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The Self Employment Income Support Scheme will provide self-employed individuals or members of partnerships with a taxable grant worth 80% of their profits, up to a cap of £2,500, for the next three months. 

To be eligible for the scheme you need to meet the following criteria:

  • traded in 2019/20, trading when you apply or would be trading if not for COVID-19 
  • filed a tax return for 2018/9 (those who have not filed, will have four weeks from 26 March to do so)
  • have lost trading profits due to COVID-19
  • intend to continue to trade in 2020/21
  • trading profits are less than £50,000 and more than half your income comes from self-employment*

*This is determined by at least one of the following conditions being true:

  • Your trading profits and total income in 2018/19
  • Your average trading profits and total income across up to the three years between 2016-17, 2017-18, and 2018-19.

The grant amount will be 80% of your average profits from the tax years 2016-2019. It will be a maximum of £2,500 per month for three months. 

Universal Credit

You may be eligible for Universal Credit while you wait for the grant, but the grant will be considered as self-employed income and may affect the amount of Universal Credit you will get. Any Universal Credit claims for earlier periods will not be affected. 

The deadline to submit your 2018/2019 Self Assessment tax return is 23 April 2020. If you have not submitted this by then, you will not be able to claim through this scheme

How HMRC works out trading profits and non-trading income

Trading profits

This is shown on your tax calculation as either profits from:

  • self-employment
  • partnerships

HMRC will work out your total trading profit after deducting any allowable expenses such as:

  • expenses
  • capital allowances
  • flat rate expenses

If your annual gross trading income, from one or more trades or businesses is more than £1,000 you can use the tax-free allowances, instead of deducting any expenses or other allowances.

HMRC will work out your share of the partnership’s trading profits by taking all partnership income, and then deduct anything that is non-trading income, such as investment income.

They will not deduct from your trading profits:

  • any losses brought forward from previous years
  • your personal allowance

Non-trading income

This is the amount recorded as ‘total income received’ on your online or paper tax calculation, less your trading income.

HMRC will work out your non-trading income by adding together all your:

  • income from earnings
  • property income
  • dividends
  • savings income
  • pension income
  • overseas income
  • miscellaneous income (including taxable social security income)

How to Claim

Check your eligibility

To check your eligibility you will need your:

  • Self Assessment Unique Taxpayer Reference (UTR) number 
  • National Insurance number 

Make a Claim

To make a claim you will need your:

  • Self Assessment UTR - if you do not have this find out how to get your lost UTR
  • National Insurance number - if you do not have this find out how to get your lost National Insurance number
  • Government Gateway user ID and password - if you do not have a user ID, you can create one when you check your eligibility online
  • bank account number and sort code you want us to pay the grant into (only provide bank account details where a Bacs payment can be accepted)

You’ll have to confirm to HMRC that your business has been adversely affected by coronavirus.

Use the online service to claim 

After you Claim

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

Claim now

View HMRC guide

Find out more about Universal Credit

 

This page was last updated 13 May 2020. 

Coronavirus Business Advice and Support

The AND business team is here to support you.

For further information or if you need help and advice, please get in touch via email or telephone 028 9147 3788