Self-Employed: Information and Guidance

A range of measures have been introduced to help support those who are self-employed through the COVID-19 pandemic. 

Self-Employment Income Support Scheme

Eligibility and Criteria

The Self Employment Income Support Scheme will provide self-employed individuals or members of partnerships with a taxable grant. The second grant is worth 70% of their profits, up to a cap of £6,570 which covers a three month period. Individuals can apply for the second grant from 17 August.

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 70% of your average profits from the tax years 2016-2019. It will be a maximum of £6,570, which covers a three month period. Individuals must prove to HMRC that their business has been adversely affected by Coronavirus on or after 14 July 2020, to be eligible for the second grant.

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 was 23 April 2020. If you had not submitted this by then, you will not be able to claim through this scheme

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 on or after 14 July 2020.

Applying for the first SEISS grant
Individuals can continue to apply for the first SEISS grant until 13 July. Under the first grant, eligible individuals can claim a taxable grant worth 80 per cent of their average monthly trading profits, paid out in a single instalment covering three months’ worth of profits, and capped at £7,500 in total. Those eligible have the money paid into their bank account within six working days of completing a claim.

Applying for the second SEISS grant
Applications for the second grant will open on 17 August. Individuals will be able to claim a second taxable grant worth 70 per cent of their average monthly trading profits, paid out in a single instalment covering three months’ worth of profits, and capped at £6,570 in total. Individuals claiming a second grant will need to prove their business has been adversely affected on or after 14 July 2020. 

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

View HMRC guide

Find out more about Universal Credit

 

Calculating Total Income and Trading Profits

Trading profits

HMRC will use the figures on your tax returns for your total trading income (turnover), then deduct any allowable business expenses and capital expenditure.

Allowable expenses include:

It also includes:

  • any business expenses deducted through the trading allowance
  • capital allowances, used to buy assets used in your business
  • qualifying care relief
  • flat rate expenses

HMRC will not deduct from your trading profits:

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

 

View HMRC Guide

Pay the Grant Back

You must tell HMRC if you think you:

  • have been overpaid
  • should not have claimed the grant (because you weren't eligible or made the claim in error)

You should tell HMRC as soon as possible if you know you’ve been overpaid or are not eligible for the grant. You may have to pay a penalty if you do not tell them.

Tell HMRC

Self Employed New Parents

Self-employed parents whose trading profits dipped in 2018/19 because they took time out to have children will be able to claim for a payment under the Self-Employed Income Support Scheme (SEISS).

The scheme requires claimants to have traded in 2018/19 with their profits making up at least half of their total income. They must also have submitted a self-assessment tax return on or before 23 April 2020 for the 2018/19 tax year.

The government has ensured parents, including mothers, fathers and those who have adopted, who took time out of trading to care for their children within the first 12 months of birth of the child or within 12 months of an adoption placement, will now be able to use either their 2017-18 or both their 2016-17 and 2017-18 self-assessment returns as the basis for their eligibility for the SEISS.

They will also need to meet the other standard eligibility criteria for support under the SEISS.

Further information will be published in early July.

Tax

Income Tax Deferral

If you’re self-employed, Income Tax payments due on the 31 July 2020 under the Self-Assessment system will be deferred until the 31 January 2021.

Anyone who is self-employed is eligible and no application is required.

Deferring Payments

HMRC will discuss your specific circumstances to explore:

  • agreeing an instalment arrangement
  • suspending debt collection proceeding
  • cancelling penalties and interest where you have administrative difficulties contacting or paying HMRC immediately

 Call the HMRC Helpline on 0800 024 1222

Monday - Friday 8am - 8pm

Saturday 8am - 4pm

Rates Relief

There will be a three month rate holiday between March 2020 and June 2020 for all business rate payers.

Rate bills will be issued in June 2020 instead of April 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