United Kingdom: Self-employed Income Support Scheme

published on 30 March 2020 | reading time approx. 2 minutes

Assistance was announced yesterday by the government to enable self-employed individuals or members of partnerships to claim a grant through the coronavirus (covid-19) Self-employment Income Support Scheme.

The scheme is open for self-employed individuals or a member of a partnership who suffered losses due to the coronavirus.

Self-employed individuals or a members of a partnership can apply if they:

have submitted an Income Tax Self-Assessment tax return for the tax year 2018-19,
traded in the tax year 2019-20,
are trading when applying, 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.

In order to qualify for the scheme self-employed trading profits must be less than £50,000 and more than half of income must 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 the 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 the average taxable income in the same period.

If the tax payer started trading between 2016-19, HMRC will only use those years for which a Self-Assessment tax return has been filed. If potential applicants have not submitted their Income Tax Self-Assessment tax returns for the tax year 2018-19, they must do this by 23 April 2020. The scheme does not apply to anyone who started trading in 2019/20.

Successful applicants will receive a taxable grant which will be 80 percent of their average profits from the following tax years (where relevant):

2016 to 2017
2017 to 2018
2018 to 2019

The maximum grant will be up to a maximum of £2,500 per month for 3 months and will be paid directly into applicants’ bank accounts in one lump sum to cover the three-month period when the scheme will be applicable. the government will be looking to make the first payments “no later than the beginning of June”.

It is not possible apply for this scheme yet. HMRC will contact eligible persons and invite them to apply online.