Latest HMRC guidance on Covid-19 support for Self-employed

by Property118.com News Team

10:26 AM, 27th March 2020
About 8 months ago

Latest HMRC guidance on Covid-19 support for Self-employed

Make Text Bigger
Latest HMRC guidance on Covid-19 support for Self-employed

The Chancellor, announced a new Self-employment Income Support Scheme to support self-employed people who have been adversely affected by COVID-19.

GOV‌.UK has further details about who is eligible for the scheme and how it will work.

Self-employed people do not need to get in touch with HMRC as the scheme isn’t yet open for applications. HMRC will contact eligible customers by the beginning of June, inviting them to apply.

Who can apply

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. This is determined by at least one of the following conditions being true:

  • having trading profits/partnership trading profits in 2018-19 of less than £50,000 and these profits constitute more than half of your total taxable income
  • having average trading profits in 2016-17, 2017-18, and 2018-19 of less than £50,000 and these profits constitute more than half of your average taxable income in the same period

If you started trading between 2016-19, HMRC will only use those years for which you filed a Self-Assessment tax return.

If you have not submitted your Income Tax Self-Assessment tax return for the tax year 2018-19, you must do this by 23 April 2020.

HMRC will use data on 2018-19 returns already submitted to identify those eligible and will risk assess any late returns filed before the 23 April 2020 deadline in the usual way.

How much you’ll 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.

We’ll pay the grant directly into your bank account, in one instalment.

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.

You will access this scheme only through GOV.UK. If someone texts, calls or emails claiming to be from HMRC, saying that you can claim financial help or are owed a tax refund, and asks you to click on a link or to give information such as your name, credit card or bank details, it is a scam.

After you’ve applied

Once HMRC has received your claim and you are eligible for the grant, we will contact you to tell you how much you will get and the payment details.

If you claim tax credits you’ll need to include the grant in your claim as income.

Other help you can get

The government is also providing the following additional help for the self-employed:

If you’re a director of your own company and paid through PAYE you may be able to get support using the Job Retention Scheme.


Share this article

Twitter Facebook LinkedIn

Comments

Jon Williams

10:07 AM, 28th March 2020
About 8 months ago

My Accountant is advising that income from property and land (outside of a Ltd Co) is not classed as self-employment. Is this correct, because if true none of the above applies!?

Dennis Leverett

10:27 AM, 28th March 2020
About 8 months ago

Reply to the comment left by Jon Williams at 28/03/2020 - 10:07
Interesting point as my Tax Return shows profit from Self Employment and Profit from UK Land and Property. If you have shares etc. you make a gain and can't claim expenses. If you make a profit (a financial gain, especially the difference between the amount earned and the amount spent in buying, operating, or producing something) ie a business. but the Government doesn't actually see it that way even if you are truly self employed.

Chris Bryan

15:24 PM, 28th March 2020
About 8 months ago

I have the same question I have been told that if you manage and work directly with you property then you could be a business and if you have them managed and have little direct management then it’s investment but not sure what to think


Leave Comments

Please Log-In OR Become a member to reply to comments or subscribe to new comment notifications.

Forgotten your password?

OR

BECOME A MEMBER

Chancellor cuts housing support

The Landlords Union

Become a Member, it's FREE

Our mission is to facilitate the sharing of best practice amongst UK landlords, tenants and letting agents

Learn More