Being self-employed offers a great deal of freedom. Not only does it provide the possibility of organising and managing your working schedule as you see fit, it also allows you to take control of your future and steer it in a way that works for you and your family.
However, it’s not always plain sailing and, as a result of recent events, you might now be in a position where you can no longer operate in the same way as you could before. Whether this is due to having to greatly reduce your hours or not being able to work at all, the government is offering support through its Self-Employment Income Support Scheme.
What is the Self-Employment Income Support Scheme?
If you are a self-employed individual, or a member of a partnership which has been adversely affected by coronavirus, then you can apply for a grant from the government to assist you with your income. This is currently 80% of your average monthly trading profits, which will be paid out in a single instalment covering three months’ worth of profits, capped at £7,500 in total.
How do I know if I am eligible?
In order to claim, the following must apply to you:
- You traded in the tax year 2018 to 2019 and submitted a self-assessment tax return on or before 23 April 2020 for that year
- You traded in the tax year 2019 to 2020
- You intend to continue to trade in the tax year 2020 to 2021
- You carry on a trade which has been adversely affected by coronavirus
If you’re uncertain as to whether you’re eligible, then you can check here.
When do I need to apply by?
If you are eligible and you want to make a claim, you must do so by 13 July 2020.
The government has recently announced it will be extending the scheme and, if you are eligible, you will be able to make a claim for a second and final grant in August 2020. You can find out more about this here.
Can I continue to work if I make a claim?
Yes. You can continue to work, start a new trade or take on other employment including voluntary work. The grant will not need to be repaid, but Income Tax and National Insurance will apply.
How does it work?
HMRC will work out your eligibility by first taking a look at your 2018 to 2019 self-assessment tax return. Your trading profits must be no more than £50,000 and at least equal to your non-trading income.
If you’re not eligible based on your 2018/19 return then they will review all other returns relating to the years 2016/17, 2017/18 and 2018/19.
Can I claim if I am a limited company?
No, you cannot claim the grant if you’re a limited company or operating a trade through a trust.
How can I make a claim?
A claim must be made by you directly. You can’t ask another party to make a claim on your behalf, including a tax agent or adviser, as this could significantly delay any payments.
Here at AMR we are experts at helping businesses of all sizes with their bookkeeping and payroll requirements. If you have any questions about the contents of this blog or you need professional bookkeeping advice, our friendly team will be happy to assist you. Get in touch and find out how our specialisations can help you and your business.
