Self-employed: Income Support Scheme

The following information is based on the information publishes as of 26 March. It is intended as an indication of how the scheme will work, as no detailed guidance issued yet.

COVID-19 Statutory self-employment pay scheme: the chancellor announced new measures on 26 March 2020 that apply to Self-employed (Sole Traders) individuals or members of a partnership.

Who Can Claim it and What are Eligibility Criteria?

Self-employed (Sole Traders) and members of a partnership filing their personal tax returns. If you started trading between 2016-19, HMRC will only use those years for which you filed a Self-Assessment tax return hence it is important you file all your outstanding personal returns by 23 April 2020.

This scheme do not apply to company directors filing their Self-Assessment tax returns but receiving pay through limited company payroll (PAYE).  

Eligibility Criteria

· You have submitted your Income Tax Self Assessment tax return for the tax year 2018-19, or you will submit your return by 23 April 2020

· Have 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

· You have lost trading/partnership trading profits due to COVID-19

· Your self-employed trading profits must also be less than £50,000.

· Additionally, more than half of your income come from self-employment.

How much Support is on offer?

In line with the help offered to employees, chancellor offered similar conditions to Self-employed: a taxable grant which will be 80% of the average profits from the tax years (where applicable) with a maximum of £2, 500 per month for 3 months.

Figures are based on the average earnings for the following years:

  • 2016 to 2017
  • 2017 to 2018
  • 2018 to 2019

Average is based on 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.

Grant will be paid directly into your bank account, in one instalment.

The scheme may be extended if necessary.

How Can I Access It?

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.

HMRC will contact you if you are eligible for the scheme and invite you to apply online.

When It Will Be Available?

Initial assessment is for this scheme to be rolled out in June 2020. Brand new system need to be created by HMRC to process the applications and also extra time was given to allow for late submissions of the outstanding returns.

Important Note

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.