The Chancellor announced on 29 May some welcome news that the Self-Employment Income Support Scheme will be extended for a further three months.
The first grant covering March, April and May must be claimed from HMRC by 13 July 2020. So don’t delay and make your claim.
The second grant covering June, July and August can be claimed from August 2020 (date to be confirmed). Key points on the second and final grant are as follows:
- The eligibility criteria is the same for both grants (please see below)
- You will need to confirm in the second grant application that your business has been adversely affected by coronavirus (see below records required)
- The grant is based on 70% of your average monthly trading profits, capped at £6,570 in total.
- The grant will be paid to you in one instalment
- The grant is not repayable but is subject to income tax and national insurance
- The grant will be reportable on your 2020/21 tax return
- You can claim for the second grant even if you didn’t claim the first one.
- If you receive the grant you can continue to work, start a new trade or take on other employment including voluntary work, or duties as an armed forces reservist.
Who can claim:
You can claim if you’re a self-employed individual or a member of a partnership and all of the following apply:
- 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 on a trade which has been adversely affected by coronavirus
- to assess 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.
Your business could be adversely affected by coronavirus if, for example:
- you’re unable to work because you:
- are shielding
- are self-isolating
- are on sick leave because of coronavirus
- have caring responsibilities because of coronavirus
- you’ve had to scale down or temporarily stop trading because:
- your supply chain has been interrupted
- you have fewer or no customers or clients
- your staff are unable to come in to work
Record keeping and reporting
You must keep a copy of all records in line with normal
self-employment record keeping requirements, including:
- the amount claimed
- the claim reference number
You should also keep any evidence that your business has been adversely affected by coronavirus such as:
- business accounts showing a reduction in turnover
- confirmation of any coronavirus-related business loans you have received
- dates your business had to close due to lockdown restrictions
- dates you or your staff were unable to work due to coronavirus symptoms, shielding or caring responsibilities due to school closures
FIND OUT MORE
Further guidance will be announced by HMRC on 12 June 2020.
If you need advice on this or any of the other measures available to support businesses affected by the coronavirus pandemic, please contact your usual Moore adviser.