Coronavirus: Self-employed Income Support Scheme

Having seemingly been ignored, the Government announced support for the self-employed on 26 March with it’s Income Support Scheme. Similar in some ways to the support for employers, the main question was always going to be, how will it be calculated.

Updated May 2020 – see below on how to apply and check eligibility

Self-employed workers can claim the lower of 80% or £2,500 a month for the next three months (April, May, June 2020) based on the following eligibility criteria:

you have submitted your 2019 tax return;
traded as self-employed in 2019/20, are still trading and intent to trade in 2020/21; and
have lost trading/partnership trading profits due to Coronavirus.

Further, your self-employed income must be less than £50,000 and more than half your income. HMRC set out two conditions, at least one of which must be 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

Note: if you haven’t submitted your 2019 tax return, you can still be eligible if you file before 23 April 2020

HOW MUCH WILL YOU GET?

HMRC will only look at the 2016-17, 2017-18 and 2018-19 tax years. If you have trading in all three years they will add the trading profits together and divide by three. This will then be divided by 12 to give the monthly average.

You will receive the lower of 80% of that monthly average or £2,500 per month.

All three months will be paid in one lump some but this will be in June 2020. If you will struggle for cash before then, speak to your accountant straight away.

HOW DO I APPLY?

HMRC have contacted everyone they see as eligible by email or post. However, you can also check eligibility and start the application process here.

You will need:

Unique Tax Reference
NI Number
Government Gateway login details
Bank details

It is a very simple application and payments should be received within 6 days.

If you disagree with your eligibility status or the amount HMRC suggest you are due, please get in touch and we’ll be happy to check for you.

If you have any other questions do let us know, we’ll set out as many as possible below:

I'm a director of my own company, which scheme should I apply for?

Whilst you complete a self-assessment tax return, if you’re income is salary and dividends from your company, you do not count as self-employed.

You may be able to claim up to 80% of your salary via the Job Retention Scheme but there is currently nothing to cover any income you claim as dividends.