The Government has now announced its scheme to financially support the self-employed. The scheme will allow the self-employed to claim a grant for up to 80% of trading profits up to a maximum of £2,500 per month for the next 3 months.
The scheme is open to self-employed individuals or members of partnerships who:-
- have submitted an Income Tax Self Assessment tax return for the tax year 2018-2019;
- traded in the tax year 2019-2020;
- are trading when making the application or would be trading but for having to close due to the coronavirus;
- intend to continue trading in the tax year 2020-2021;
- have lost trading or partnership trading profits due to the coronavirus;
If you have not submitted your tax return for 2018-2019, you have until 23 April 2020 to do so.
Your trading profits must be less than £50,000 and more than half of total income from self-employment which will be determined by at least one of the following conditions:-
- trading profits and total income in the tax year 2018-2019
- average trading profits and total income for three tax years between 2016-2017, 2017-2018 and 2018-2019.
If you started trading between 2016-2019 then HMRC will use those years for which you filed a self-assessment tax return.
HMRC will contact you if you are eligible for the scheme and invite you to apply on-line. If you are eligible HMRC will then contact you to tell you how much you will get and the payment details. It will be up to a maximum of £2,500 per month for 3 months and will be paid in one installment.
Grants are expected to be paid in June which is some way off. If you have experienced a significant drop in your income due to the virus then you should consider some of the other options the Government has made available to businesses such as support for businesses through deferring VAT and Income Tax payments or support for businesses through the Coronavirus Business Interruption Loan Scheme or you could apply for Universal Credits.
If you are a director of your own company and are paid a salary through PAYE, you will not be eligible for the Self-Employment Income Support Scheme but may be able to be covered for your salary through the Job Retention Scheme.
If you have any questions on this issue or any other employment law problem that you are currently experiencing as a business, contact Lisa Branker, Employment Law Expert here at Richard Reed on 0191 567 0465 or email her directly at: Lisa.Branker@richardreed.co.uk