COVID-19 – Update to support for the self-employed and partners in a trading business

By now, businesses in the UK will be aware of the radical support the government has put in place to help those businesses suffering as a result of Coronavirus and the public restrictions in place.

However, the government have been criticised for not doing enough to help self-employed who have been affected. HMRC has confirmed an extension of the Self-Employment Income Scheme Support (SEISS) grant for self-employed individuals who are still struggling as a result of Covid-19.

This support is available to workers who are either self-employed or a member of a partnership. There are however some considerations to confirm if you can apply:

To apply for this support, you must:

1. Have submitted your self-assessment tax return for the 2018/19 tax year.
2. Traded in the tax year 2019/20.
3. Be trading / or would be trading if it wasn’t for Covid-19.
4. Intend to continue trading in the 2020/21 tax year.
5. Have lost trading profits due to Covid-19.
6. Trading profits must be less than £50,000.
7. More than half of your income must come from self-employment. *

*It is essential to be able to show trading profits in 2016/17, 2017/18 or 2018/19 – These profits must average less than £50,000 and constitute more than half of your taxable income in the same period. If you began trading between 2016 and 2019, HMRC will only use those years for which you filed a Self-Assessment tax return.

Individuals do not need to have claimed the first grant to the eligible for the second and final grant but must meet the criteria as stated above. Those looking to claim must be able to show that the business has been adversely affected by Coronavirus.

How to Apply

Applications for the first round of the scheme are due to close on 13^th July 2020, and then the second round will open in August 2020.

There will be access to apply for this scheme through gov.uk only. If you receive texts, calls or emails offering financial help if you provide your personal details with them, this is a scam.

After Application

Once you have applied the HMRC will be in touch if they feel you are eligible for the grant, and they will contact you to tell you how much you will receive.

How much will be received?

To work out exactly how much you will receive off the government through the Coronavirus Self-Employment Income Support Scheme, HMRC will average the total trading profits for the 3 tax years (where applicable) and use this figure to calculate a monthly amount. The grant will be paid directly into your bank account, in one instalment. This will be based on 70% of your earnings as opposed to 80% as in the first grant. Grants will be capped at £6,570.