The Self-Employed Income Support Scheme
This page was last updated on 8 March 2021
The scheme provides a grant to self-employed individuals or partnerships, worth 80% of their profits up to a cap of £2,500 per month. (The details of the 5th grant have yet to be released)
HMRC will use the average profits from tax returns in the last 3 years to calculate the size of the grant. The scheme is open to those where the majority of their income comes from self-employment and who have profits of less than £50,000.
This grant has been extended until September 2021 by way of 5th grant that runs from 1 May 2021 - September 2021.
The guidance on the 5th grant states it will be worth:
- 80% of 3 months’ average trading profits, capped at £7,500, for those with a turnover reduction of 30% or more
- 30% of 3 months’ average trading profits, capped at £2,850, for those with a turnover reduction of less than 30%
Are you eligible?
To be eligible for the 4th grant extension:
Your 2019-2020 Self Assessment tax return will be assessed and your trading profits must be no more than £50,000 and at least equal to your non-trading income.
If you’re not eligible based on your 2019-2020 Self Assessment tax return, they will then look at the tax years 2016 to 2017, 2017 to 2018, 2018 to 2019 and 2019 to 2020.
Declare an intention to continue to trade and either:
- are currently actively trading but are impacted by reduced demand due to COVID-19
- were previously trading but are temporarily unable to do so due to COVID-19
Reasonably believe there will be a meaninful reduction in your trading profits due to a reduced demand or you inability to trade.
Definition of impacted by reduced demand eg:
- been unable to work at your normal capacity because of supply chain disruptions
- contacts cancelled and not replaced
- less customers/clients than normal, because of social distancing or Government restrictions
You cannot claim if the impact on your business has just been an increase in costs.
Definition of trading but had to temporarily close eg:
- closed because of Government restrictions
- you have to shield or self-isolate in-line with NHS guidelines and you are not able to work from home
- you receive a positive test for Coronavirus and cannot work
- you have parental caring responsibilities and cannot work
To be eligible for the original scheme you must meet all the criteria below:
- Be self-employed or a member of partnership
- Have lost trading/partnership trading profits due to COVID-19
- File a tax return for 2018-19 or 2019-20 as self-employed or a member of a trading partnership.
- Have traded in 2019-20; be currently trading at the point of application (or would be except for COVID 19) and intend to continue to trade in the tax year 2020 to 2021
- Have trading profits of less than £50,000 and more than half of your total income come from self-employment
This can be with reference to at least one of the following conditions:
- Your trading profits and total income in 2018-19 or 2019-20
- Your average trading profits and total income across up to the three years between 2016-17, 2017-18, and 2018-19 or 2019-20
How to Access it
You should not contact HMRC now. HMRC will use existing information to check potential eligibility and invite applications once the scheme is operational. HMRC will then pay the grant directly to eligible claimants’ bank account. If you are eligible for the 4th grant If you are eligible, HMRC will contact you in mid-April to give you a personal claim date. This will be the date that you can make your claim from.
When can I access it?
The 4th grant should be available from mid April. The 5th grant will be available from end of July. The amount you receive of the 5th grant will be determined by how much your turnover has been reduced in the year April 2020 to April 2021.
Further information on how to access these schemes can be found here.
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