On Thursday the 26th March The Chancellor Rishi Sunak announced a package of support the self-employed during COVID 19. Someone who is self employed should not be confused with a director of a limited company, directors are treated as employees of the company and further information can be found here.
Who is eligible?
Be self-employed or a member of partnership;
Have lost trading/partnership trading profits due to COVID-19;
File a tax return for the 2018/19 tax year as self-employed or a member of a trading partnership. Those who have not yet filed for 2018/19 will have an additional 4 weeks from 27th March 2020 to do so;
Have traded in the 2019/20 tax year; be currently trading at the point of application (or would be except for COVID 19) and intend to continue to trade in the tax year 2020/21
Have trading profits of less than £50,000 and more than half of your total income is from self-employment. This can be with reference to at least one of the following conditions:
Your trading profits and total income in the 2018/19 tax year
Your average trading profits and total income across up to the three years between 2016/17, 2017/18, and 2018/19
How much will I get?
This scheme will allow you to claim a taxable grant worth 80% of your trading profits up to a maximum of £2,500 per month for the next 3 months.
To work out the average HMRC will add together the total trading profit for the 3 tax years2016/17, 2017/18, and 2018/19 (where applicable) then divide by 3 (where applicable), and use this to calculate a monthly amount.
How do I claim the grant?
HMRC will contact businesses that are eligible for the scheme and invite you to apply online. Once you have returned the form HMRC will tell you how much you get. This will be paid into directly into your bank account, in one instalment.
When will I receive the grant?
The scheme is expected to be up and running by the beginning of June. When the scheme does roll our those eligible will receive three months of backdated pay in June, in one go.
What if my average profits are over £50,000 or I only become self employed in tax year 19/20?
In both these instances you will not be eligible for the COVID-19 self employed income support. However there is other support available such as Universal Credit and Business Interruption Loan.
To work out if your elidglbe for universal credit and how much you may be entitled to we suggest using a calculator such as entitledto.