Chancellor Rishi Sunak announced the British Government’s new support scheme for the self-employed on 26 March, 2020. Those self-employed will be able to access this taxable grant who have been active in the last tax year and are active now, planning to carry on with the business later on as well.
HMRC will use the average profits from tax returns in 2016-17, 2017-18 and 2018-19 to calculate the amount of the grant. They will provide 80% of the monthly average figure above, up to a cap of £2,500 a month.
You will be able to apply for the Self-employment Income Support Scheme (SEISS) if
- you lost trading profits due to COVID-19,
- your trading profits were less than £50,000
- you submitted your self-assessment for the 2018/19 tax year,
- more than half of your total income come from self-employment in 2018/19
Those who failed filing their 2018/19 self-assessment till the deadline of 31 January 2020, now get 4 more weeks to complete it, thus qualifying for the scheme.
The support will be available as a one lump sum throughout 3 consecutive months, starting with June.
You DO NOT need to do anything at the moment, the HMRC will contact all eligible self-employed people directly until June the latest.
Those who pay themselves a salary and dividends through their own company are not covered by the scheme but will have 80% of their salary covered by the Coronavirus Job Retention Scheme if operating through PAYE.
Those self-employed in the lowest income brackets can apply for universal credit.
Our suggestions for now:
- Make sure your contact details are up-to-date at HMRC so they will reach you when the time has arrived. This will automatically update if you file your latest Tax return now,
- File your 2019/20 tax return as soon as possible, so you can prove you are still in the business, which is one of the criteria mentioned above. Although your 2019/20 profit will not count in the calculation, the fact that you still carry on the business activities will be useful
- Further advantage of preparing the Tax Return as soon as possible that now you have time to do it. Later you will need all your energy to rebuild your income and business.
- And of course you need a clear plan to get prepared with all your future tax payments. If it requires any negotiations with HMRC to set up a payment plan, it can be done now through the Coronavirus Helpline
We offer more than 50% Early bird discount on the preparation of the Self-Assessment Tax Return, please contact us for further details.