Government announces further support for the self-employed
On 27 March 2020, the Government announced their intention to provide further support for the self-employed in the form of a taxable cash grant.
The scheme allows individuals to claim a taxable grant worth 80% of their trading profits up to a maximum of £2,500 per month for the 3 months from March to May 2020. This may be extended if needed.
How will the grant be paid?
The taxable cash grant will be in the form of a single lump sum to cover the three months from March to May 2020. It will be paid in June 2020 to those that are eligible directly into their bank account.
Am I eligible?
The self-employed will be eligible if their trading profits for 18/19 were less than £50,000 and more than 50% of their income stems from self-employment.
Alternatively, they will be eligible if their average trading profits for the tax years 16/17, 17/18 and 18/19 were less than £50,000 and more than 50% of their income stems from self-employment. For those that started trading between 2016-19 HMRC will only use those years for which a Self-Assessment tax return has been filed.
The scheme will be open to those that have submitted an income tax self-assessment tax return for the year to 5 April 2019 (the 18/19 tax year). Worth noting that HMRC’s guidance does state that the 18/19 tax return must be filed by 23 April 2020 in order to eligible! For those that have yet to file their 18/19 tax return, it represents something of an opportunity.
Additional eligibility criteria include the requirement that the individual must have lost trading profits due to Covid-19 and they must have traded in 2019/2020, intend to trade in 2020/2021 and are trading at the point of application or would have been except for Covid-19.
What about tax credits?
Individuals who claim Tax Credits would need to include the grant as part of their income.
How do I apply?
HMRC will contact those are eligible to apply. Applications will need to be made online once invitations have been issued by HMRC.
Click here for the latest information on government support for the self employed
Not self employed? Click here for the latest on Government support for employees
For expert advice on commercial law, please contact:
- Laura Kurowski at our Huddersfield office on 01484 483800
- James Bell or Andrew Crabtree at our Halifax office on 01422 339600