On 26th March, the Chancellor announced a grant to be paid to the self-employed and members of a partnership who have lost income due to coronavirus. Read on to find out how the scheme can help you....
Income Support Scheme for the self-employed
This scheme will allow you to claim a taxable grant worth 80% of your trading profits, up to a maximum of £2,500 per month, for the next 3 months. The 80% figure will be based on the average net profits for 2016/17 to 2018/19.
There is a further condition that your self-employed trading profits must also be less than £50,000 and more than half of your income must come from self-employment.
Only those who have submitted their 2018/19 tax return, traded in 2019/20 and intend to trade in 2020/21 are eligible. If you have not submitted your Income Tax Self-Assessment tax return for the tax year 2018/19, you must do this by 23rd April 2020 to qualify.
HMRC will contact taxpayers who are eligible for the scheme and invite them to apply online. HMRC will pay the grant directly into the taxpayer’s bank account, in one instalment, in June 2020.
If you claim tax credits you will need to include the grant in your claim as income.
What was absent from the Chancellors statement was support for personal service companies (PSC) who are likely to fall between two stools. HMRC guidance however states “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 (JRS)” but how many PSC directors can justify that they are furloughed!
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