COVID-19 – Self-Employment: What are my options?
- To benefit from the Scheme, the following conditions must be met:
- You must be self-employed or a member of a Partnership and have traded in 2019/2020, with the intention to continue trading into 2021;
- A self-assessment tax return must have been filed for 2018/2019. The deadline for filing has been extended to 23rd April 2020.
- Your trading profit must have been less than £50,000 in 2018/2019 or the average trading profit over the last three tax years must be less than £50,000
- Half of your income must come from self-employment and your income must have been adversely affected by COVID-19
What support is available?
Eligible applicants to the Scheme will receive a grant of 80% of their average trading profit. This will be calculated by HMRC from the tax returns over the preceding three years. If you have been trading for a shorter period, it will be taken from an average of reported profit from your filed tax returns. However, as eligibility relies on you having traded in 2019/2020, self-employed workers trading after 5th April 2019 will not be covered by the Scheme.
Any grants awarded will be capped at £2,500pcm for the three month period from March to May. Payments are expected to be made in June 2020 in a lump sum, backdated to March. The government has confirmed there is scope for the Scheme to be extended past these three months if circumstances require it.
How do I make a claim?
You do not need to do anything at this stage, other than ensure you tax return for 2018/2019 is filed prior to the extended deadline of 23rd April 2020. HMRC will contact eligible individuals in due course.
If I don’t qualify, what other support is available?
Unfortunately, not all self-employed workers will be eligible under the Scheme. For those who do not qualify, the following further support may be available if you are affected by COVID-19:
- VAT Deferral Scheme – if you are a VAT registered business, you may be able to apply to defer your VAT payment until a later date
- Self-Assessment payments due to be paid on account in July 2020 may be delayed until January 2021
- Business rates holidays for businesses in certain sectors, subject to certain conditions being met
- Coronavirus Business Interruption Loan Scheme for SME businesses These provisions are subject to various criteria being met and eligibility will depend on the nature of your business.