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Latest Govt Announcements COVID-19

On 29 May the Government announced an update to the Income Support Scheme for the Self-Employed.

Further guidance on how this will operate was also published on 12 June 2020.

PLEASE NOTE that the deadline for making a claim for the first period is 13 July 2020. 

Details can be found here:

https://www.gov.uk/guidance/claim-a-grant-through-the-coronavirus-covid-19-self-employment-income-support-scheme

As with all the financial support being provided for both businesses and individuals, we have received numerous queries on how these schemes work.

We have updated our list of the most commonly asked questions in light of the latest guidance which we hope you will find useful.

Please read the guidance at the above link as well as our FAQs below.

 

FAQs:

 

Who is this scheme for?

This scheme is available for any self-employed individual or member of a partnership who meet certain criteria.

You do not need to have claimed the first grant to receive the second grant, as you may only be adversely affected in the second phase. 

 

How much will I receive?

The scheme now runs for two periods: 

For the period up to and including 13 July 2020, the grant will be 80% of average trading profits from the tax years 2016-17, 2017-18 and 2018-19.

The maximum payment will be £2,500 per month for 3 months (total £7,500)  and each claim will be paid directly to your bank account in one instalment.

From 14 July 2020 the grant will be 70% of average trading profits from the tax years 2016-17, 2017-18 and 2018-19. 
The maximum payment will be £2,190 per month for 3 months (total £6,570paid directly to your bank account in one instalment. 

When can I apply?

The scheme is currently open for the first period and HMRC should have contacted you if you are eligible for the scheme and invited you to apply online.

The closing deadline for claiming the first grant is 13 July 2020. 

Claims for the second grant are expected to be made from August 2020. 

What criteria do I have to meet?

In order to be eligible for the grant you:

  • must have submitted your Self-Assessment income tax return for the tax year 2018-19
  • must have traded in the tax year 2019-20
  • must be trading when you apply, or would be except for COVID-19
  • intend to continue to trade in the tax year 2020-21
  • must have lost trading/partnership profits due to COVID-19

 

Is there a maximum income level?

  • your self-employed trading profits must be less than £50,000, AND
  • more than 50% of your taxable income must come from your self-employment

 

My income fluctuates from year to year – how will this be assessed?

Your trading profits must average less than £50,000 per year by meeting one of the following tests:

  • having trading/partnership trading profits in 2018-19 of less than £50,000 and constituting more than 50% of your total taxable income, OR
  • having average trading profits in 2016-17, 2017-18 and 2018-19 of less than £50,000 (i.e. divide total trading profit for three years by three) with these profits constituting more than 50% of your average taxable income in the same period.

 

I started trading after 2016-17 – am I still eligible?

Yes. Provided that you meet the above average criteria. HMRC will use the average of the years for which you have submitted a Self-Assessment tax return – but this must include 2018-19.

 

I have not submitted my 2018-19 tax return yet – will I still be eligible?

You must have submitted your tax return by 23 April 2020. HMRC will risk assess any late returns filed between the standard filing deadline of 31 January 2020 and 23 April 2020.

 

Please call or email your usual contact at Rayner Essex to discuss any specific issues you have with this or any of the Coronavirus financial support measures that have been announced so far.

 

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