The Self-Employment Income Support Scheme is a grant for members of partnerships or self-employed individuals whose businesses have been affected badly by COVID-19. The first grant allowed beneficiaries to claim a first taxable grant and it closed on July 13 2020.
Applications for the second taxable grant are currently active and altogether gives 70% of your average monthly profits from trading for a maximum value of £6,750. It will be paid in one instalment which spans 3 months of profits.
Even though this grant is for self-employed individuals or members of partnerships, those are not the only requirements you need for a claim. If you didn’t apply for the first grant, you can apply for the second one as long as:
– Your work was adversely affected by COVID-19 on or after July 14. This includes being unable to find work or work within social distancing regulations, had a significant decrease in customers, had contracts cancelled.
– Your trading profits for the 2018-2019 tax returns was not higher than £50,000 but it was at least the same as your non-trading income.
– You traded for the tax year of 2018-2019 and submitted tax returns for that year on or before April 23 2020.
– You traded in the tax year of 2019-2020.
– You plan to continue to trade in the tax year 2020-2021.
It is also important to note that:
– A Maternity Allowance claim will not affect your eligibility for this grant in any way.
– You are ineligible for the grant if you trade through a trust or limited company.
– HMRC will look at your 2016-2017, 2017-2018 or 2018-2019 tax years if your 2018-2019 self-assessment tax return isn’t eligible.
What to Do If You’re Eligible
If you meet up to the criteria as outlined above, then you are eligible and need to make the claim on or before October 19, 2020.
After application, you need to be able to show and prove to HMRC that your business was adversely affected by COVID-19. Any records you have such as business accounts that show a turnover reduction with important dates should be handy to support your claim.
After the Claim
HMRC will go through your claim and verify your eligibility. If it checks out, they will pay the calculated amount directly to your bank account within 6 working days. You should receive an email when the wheels start turning and the payment is in process.
At this point, all you have to do is relax and wait for the money to come into your account. Do not bother contacting HMRC unless it has been up to 10 days since you submitted the claim and you haven’t seen the grant.
How Much Do you Stand to Gain
After HRMC validates your claim, they’ll calculate your grant from your average trading profit for the 3 tax years of 2016-2017, 2017-2018 and 2018-2019.
They find the average by dividing your cumulative trading s or losses for those three tax years by 3. HMRC now uses the value of the average trading profit to determine how much you will receive for the grant.
The second self-employment income grant is calculated as 70% of the average of your monthly trading profits. HMRC will pay this amount once, and it will cover the profits of 3 months at a capped value of £6,750. Checking the online platform will automatically calculate it for you so you see how much you are eligible to receive.
Don’t rush to call HMRC and sit on hold, you can easily check online. They have a lot of resources to help you out if you hit a jam. Remember, October 19, 2020 is the deadline. So, get those claims in before it is too late.