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Latest Govt Announcements COVID-19

The Government announced its Income Support Scheme for the Self-employed last week.

Guidance on how this will operate was also published shortly after.

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 are receiving numerous queries on how these schemes work.

We have put together a list of the most commonly asked questions which we hope you will find useful.

Please do 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.

 

How much will I receive?

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 and each claim is expected to be paid directly to your bank account in one instalment.

 

When can I apply?

The scheme is not yet open and HMRC plan to contact you if you are eligible for the scheme and invite you to apply online.
HMRC expects that taxpayers will be able to make their first claim by the beginning of June.

 

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 submit 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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