The government has now announced how it will support self-employed workers during the coronavirus crisis. Here’s answers to our FAQ’s, we will update as more details are released.
Who is eligible?
You must meet ALL the following criteria:
- you submitted your Self-Assessment tax return for 2018-19, which was due by 31/1/2020. If you still haven’t filed, you have up to 23/4/20 to file it and still be eligible for the grant
- you traded in the current tax year (2019-20)
- you are trading when you apply, or you would be except for COVID-19
- you intend to continue to trade in the tax year 2020-21
- you’ve lost trading profits due to COVID-19
- More than half your income is from self-employment and your sole trader profits are less than £50k. The period you look at for this is EITHER:
- 2018/19 or
- Average of 2016/17, 2017/18 and 2018/19 (or less if you started trading in that period)
At present it is unclear whether a calculation is required for point 5, or whether the individual merely needs to make a declaration to that effect.
How much will I get?
The grant will be worth 80% of your trading profits up to a max of £2,500 per month for the next 3 months, which could potentially get extended beyond that.
How do I apply?
The scheme will open in June. You cannot do anything yet. HMRC will contact those who qualify, we expect by letter. Applications will be online from within your Gov.UK account. **Please wary of potential scams – there won’t be calls, texts or emails from HMRC asking for bank details.**
Is the grant tax-free?
No, it is taxed like normal trading income
I am a director and shareholder and I pay myself by salary and dividends – do I qualify for the self-employment grant?
Not for this scheme as you are not classed as self-employed. You may be eligible for:
- Statutory sick pay for up to 2 weeks of absence due to coronavirus
- Up to 80% of your payroll salary via the ‘Coronavirus Job Retention Scheme’ – read more here
Can I still work and claim the grant?
The exact qualifying condition as shown on https://www.gov.uk/guidance/claim-a-grant-through-the-coronavirus-covid-19-self-employment-income-support-scheme#who-can-apply is if you:
‘have lost trading/partnership trading profits due to COVID-19′
I.e. the rule is not ‘you must have stopped work due to COVID-19’
It appears that even those with modest reductions in income would be eligible, but the rules could be refined further when the details are ironed out.