The Self Employment Income Support Scheme will provide self-employed individuals or members of partnerships with a taxable grant. The third grant is worth 80% of their profits, over a three month period, up to a cap of £7,500.
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 third grant amount will be 80% of your average profits from the tax years 2016-2019. It will be a maximum of £7,500 for a three month period. Individuals must prove to HMRC that their business has been adversely affected by Coronavirus on or after 14 July 2020. You do not have to have received the first grant to be eligible for the second grant.
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.
This is shown on your tax calculation as either profits from:
HMRC will work out your total trading profit after deducting any allowable expenses such as:
- 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
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
- savings income
- pension income
- overseas income
- miscellaneous income (including taxable social security income)