Latest information on the scheme:
The scheme is available if you are self-employed or a member of a partnership and you have been adversely affected by coronavirus (COVID-19).
The scheme is now closed to new claims for the first grant.
The scheme has however been extended to apply for a second grant, and you can apply from the 17th August for a second, final grant, on the proviso you were eligible for the first grant and can confirm to HMRC that your business has been adversely affected due to COVID-19 on or after 14 July 2020.
The grant does not need to be repaid, but will be subject to Income Tax & National Insurance. You will need to make the claim on or before the 19 October 2020. There is a requirement that you must keep evidence to confirm your business was adversely affected at the time you made your claim. The online service is not available yet. If you are eligible you will be able to make a claim for a second and final grant from 17 August 2020.
A summary of the scheme:
If eligible, the scheme allows you to claim a taxable grant of 70% of your average monthly trading profits, paid out in a single instalment covering three months of profits, capped at £6,570 in total.
HMRC will contact you if you are eligible, and they will work out your eligibility for the second grant in the same way as they did for the first grant. You are able to still make a claim for the second grant if you are eligible, even if you did not make a claim for the first grant. If you receive the grant you can continue to work, start a new trade, or take on other employment, which includes voluntary work.
To find out how HMRC works out trading profits and non-trading income for the self employed – please click HERE.
Adverse conditions caused by coronavirus include:
Please click HERE for examples of adverse conditions.
A self-employed individual or a member of a partnership and you carry on a trade which has been adversely affected by coronavirus on or after 14 July 2020.
HMRC will first look at your 2018 to 2019 Self Assessment tax return. Your trading profits must be no more than £50,000 and at least equal to your non-trading income.
You cannot claim the grant if you trade through a limited company or a trust.
If you are not eligible based on the 2018 to 2019 Self Assessment tax return, then HMRC will look at the tax years 2016 to 2017, 2017 to 2018, and 2018 to 2019.
How much can you claim:
You will get a taxable grant based on your average trading profit over the 3 tax years:
2016 to 2017
2017 to 2018
2018 to 2019
HMRC will work out your average trading profit by adding together your total trading profits or losses for the 3 tax years and will then divide by 3.
If you have not traded for all 3 years, then you can find out how the claim is calculated by clicking HERE.
The grant amount that HMRC work out for you will be paid directly into your bank account, in one instalment.
There are some circumstances that affect eligibility, these include:
A late return, amended or under enquiry
If you are a member of a partnership
If you are on or took parental leave
If you have loans covered by the loan charge
If you claim averaging relief
If you are non-resident or chose the remittance basis state aid
If you are a military reservist
adversely affected examples
To apply you will need:
You will need to confirm to HMRC that your business has been adversely affected by coronavirus on or after 14 July 2020.
HMRC have advised that you must make the claim yourself, and agents such as ourselves must not claim on your behalf as this will trigger a fraud alert, and HMRC have warned this will cause a significant delay to you receiving your payment.
*Warning* – HMRC have advised If you receive texts, calls or emails claiming to be from HMRC, offering financial help or a tax refund and asking you to click on a link or to give personal information, it is a scam. You should email it to: email@example.com and then delete it.
For further information or help and advice please email firstname.lastname@example.org or call 0121 550 8509.