COVID-19 Support for Self Employed
As of the 27th March 2020 the current support for from HMRC for self employed individuals and partnership partners is detailed in this article.
This scheme will allow you to claim a taxable grant worth 80% of your trading profits up to a maximum of £2,500 per month for the next 3 months. This may be extended if needed.
You can also defer your second payment on account for personal tax (due July 2020) - see point 4 below.
1) Do I qualify?
You can apply if you’re a self-employed individual or a member of a partnership and you:
have submitted your Income Tax Self Assessment tax return for the tax year 2018-19
traded in the tax year 2019-20
are trading when you apply, or would be except for COVID-19
intend to continue to trade in the tax year 2020-21
have lost trading/partnership trading profits due to COVID-19
Your self-employed trading profits must also be less than £50,000 and more than half of your income come from self-employment.
If you started trading between 2016-19, HMRC will only use those years for which you filed a Self-Assessment tax return.
2) How much will I get?
You’ll get a taxable grant which will be 80% of the average profits from the tax years (where applicable):
2016 to 2017
2017 to 2018
2018 to 2019
To work out the average HMRC will add together the total trading profit for the 3 tax years (where applicable) then divide by 3 (where applicable), and use this to calculate a monthly amount.
It will be up to a maximum of £2,500 per month for 3 months.
HMRC will pay the grant directly into your bank account, in one instalment.
3) How to apply?
You cannot apply for this scheme yet.
HMRC will contact you if you are eligible for the scheme and invite you to apply online.
Individuals do not need to contact HMRC now and doing so will only delay the urgent work being undertaken to introduce the scheme.
4) Deferral of Tax Payments
If you’re self-employed, Income Tax payments due in July 2020 under the Self-Assessment system will be deferred to January 2021.
There are also changes to the eligible criteria for Universal Credit. You can check availability and apply here - https://www.universal-credit.service.gov.uk/postcode-checker
5) Your Outstanding Tax Liabilities
All businesses and self-employed people in financial distress, and with outstanding tax liabilities, may be eligible to receive support with their tax affairs through HMRC’s Time To Pay service.
If you are concerned about being able to pay your tax due to COVID-19, call HMRC’s dedicated helpline on 0800 0159 559.