It has only been a week since the Chancellor announced the Coronavirus Job Retention Scheme but it has been a very long week for those waiting for a similar announcement for the self-employed.
The Self-employed Income Support Scheme is good news for a large proportion of self-employed individuals but unfortunately it is not available for everyone.
Here are the details we know so far:
Am I eligible?
You must have submitted your self-assessment tax return for the tax year 2018/19.
You have until 23 April 2020 to do so, if it is still outstanding.
You have traded during 2019/20.
You intend to to continue to trade in the 2020/21 tax year.
You are trading when you apply, or would be except for COVID 19.
You have lost trading/partnership trading profits due to COVID 19.
Your trading profits must be less than £50,000 and more than half of your income must come from self-employment. This is determined by at least one of the following conditions being true:
- having trading profits/partnership trading profits in 2018-19 of less than £50,000 and these profits constitute more than half of your total taxable income.
- having average trading profits in 2016-17, 2017-18, and 2018-19 of less than £50,000 and these profits constitute more than half of your average taxable income in the same period.
Who cannot apply?
If you have started trading since 5 April 2019.
If your average profits are over £50,000.
If you are a director of a company. Directors should claim the Job Retention Scheme Grant for their salary if they are eligible.
There is no relief for income received as dividends.
How do I apply?
HMRC will contact you directly, and ask you to apply online.
Payments will be made directly to your bank account in one instalment.
Grants will be available from early June.
How much will I receive?
Grants will be 80% of the average profits from 2016/17, 2017/18 and 2018/19 or however long you have been trading if you started after 5 April 2016.
It will be a maximum of £2,500 per month.
The initial grant will cover the 3 months to 31 May 2020, but this may be extended if needed.
It's a non-repayable grant but taxable.
You can still work and claim.
What can I do in the meantime to help with cashflow?
Speak to your bank about extending your overdraft.
Use the funds that you have put aside for your July payment on account, as this is now not due until January 2021.
Apply for a Coronavirus Business Interruption Loan
Apply for Universal Credit if you are not eligible for the self-employed grant.
What can I do if I am not eligible?
You should apply for Universal Credit if you are eligible
You will receive an initial advance once your Universal Credit claim has been processed.
Stay positive, we are in this together.
You can access the full guidance here.