Government measures to help the self-employed

For the self-employed the government has announced additional measures to support them in the current crisis.

If a client is self-employed or a member of partnership and

  • Has submitted an income self-assessment for the tax year 2018-19
  • Traded in the year 2019-20
  • Are trading, or would be except for Covid-19
  • Intend to continue to trade in 2020-21
  • lost trading/partnership profits due to Covid-19

Self-Employed profits must be less than £50,000 and more than half of an individual’s income must come from self-employment.

This value is calculated by meeting at least one of the conditions below for an individual to

  • Have trading profits in 2016-17, 2017-18 and 2018-19 of less than £50,000 and these profits constitute more than half of taxable income
  • Have average trading profits in 2016-17, 2017-18 and 2018-19 of less than £50,000 and these profits constitute more than half taxable income
  • If a client had started trading from 2016-17 then HMRC will use those self-assessment returns for those years of trading.
  • If for some reason a client has not submitted a tax return for the TY 2018-19 then they must submit by the 23rd April 2020.

How much will individuals receive?

The government will provide a taxable grant of 80% of the average profits from the tax years (where applicable)

  • 2016-17
  • 2017-18
  • 2018-19

To calculate the average amount HMRC will add together the total trading profit for the 3 tax years (as applicable) and then divide by 3 (as applicable) and use this figure to calculate the monthly amount.

It will be up to a maximum of £2,500 per month for three months. This will be paid directly to an individual’s bank account

HMRC will contact eligible individuals directly and ask them to apply online. HMRC will then contact the individual to confirm how much is payable and confirm payment details.

The infrastructure around this does not yet exist so at this point HMRC are asking not be contacted directly. HMRC will make the initial contact.

The government announcement can be found at: https://www.gov.uk/guidance/claim-a-grant-through-the-coronavirus-covid-19-self-employment-income-support-schem

I hope this is of use, but if you need any further clarification we would be happy to help.

 

Lee Gardner

info@gardnerfm.co.uk

 

 

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