Claim a grant through the Self-Employment Income Support Scheme

Wednesday May 6, 2020

If you're self-employed or a member of a partnership and have been adversely affected by coronavirus (COVID-19) find out if you can use this scheme to claim a grant.

The scheme will allow you to claim a taxable grant of 80% of your average monthly trading profits, paid out in a single instalment covering 3 months, and capped at £7,500 altogether.

The grant will be subject to Income Tax and national insurance.

HMRC will work out if you’re eligible and how much grant you may get. But you can follow these steps to help you understand how they will do this and what you can do now.

Please note;

HMRC have advised that your tax agent or adviser cannot make the claim for you. You must make the claim yourself.

Who can claim

You can claim if you’re a self-employed individual or a member of a partnership and:

• you traded in the tax year 2018 to 2019 and submitted your 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 out a trade which has been adversely affected by coronavirus

You should not claim the grant if you’re above the state aid limits or operating a trade through a trust.

To work out your eligibility HMRC will first 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 the 2018 to 2019 Self Assessment tax return, HMRC will then look at the tax years 2016 to 2017, 2017 to 2018, and 2018 to 2019.

You may not be eligible if the following apply to you;

• if your return is late, amended or under enquiry
• if you’re a member of a partnership
• if you’re on or took parental leave
• if you have loans covered by the loan charge
• if you claim averaging relief
• if you’re non-resident or chose the remittance basis
• if you’re above the state aid limits

Check if you’re eligible to claim

You can use the online tool on HMRC’s website to find out if you’re eligible to make a claim.  https://www.tax.service.gov.uk/self-employment-support/enter-unique-taxpayer-reference

How much you will receive

You will get a taxable grant based on your average trading profit over the 3 tax years:

• 2016 to 2017
• 2017 to 2018
• 2018 to 2019

HMRC will work out your average trading profit by adding together your total trading profits or losses for the 3 tax years, then divide by 3.

The grant will be 80% of your average monthly trading profits, paid out in a single instalment covering 3 months, and capped at £7,500 altogether. The online service will tell you how the grant is calculated.

The grant amount will be paid directly into your bank account, in one instalment.

How to claim

The online service will be available from 13 May 2020. If you’re eligible, HMRC will tell you the date you can make your claim from. If your claim is approved you’ll receive your payment within 6 working days.

When you make your claim

You will need your:

• Self Assessment UTR
• National Insurance number

If you do not have these, please email accounts@riftaccounting.com and we will send these to you by email.

You will also need;

• Government Gateway user ID and password - if you do not have a user ID, you can create one when you check your eligibility online
• bank account number and sort code you want HMRC to pay the grant into (only provide bank account details where a BACS payment can be accepted)

You’ll have to confirm to HMRC that your business has been adversely affected by coronavirus.

If you claim the grant HMRC will treat this as confirmation you’re below the state aid limits.

HMRC will check claims and take appropriate action to withhold or recover payments found to be dishonest or inaccurate.

After you’ve claimed

Once you’ve submitted your claim, you will be told straight away if your grant is approved. HMRC will pay the grant into your bank account within 6 working days.

You must keep a copy of all records in line with normal record keeping requirements including:

• the amount claimed
• the claim reference number for your records
• evidence that your business has been adversely affected by coronavirus

You will need to report the grant:

• on your Self Assessment tax return
• as self-employed income for any Universal Credit claims
• as self-employed income and that you’re working 16 hours a week for any tax credits claims