So last week the government released the information so many of you had been waiting for. There would be help for self employed individuals!
We know that has majorly concerned so many of our clients at Advanced Accountancy and we’re pleased we can finally bring you some positive news.
This scheme announced will allow you to claim a taxable grant worth 80% of your trading profits up to a maximum of £2,500 per month for the next 3 months. Of course no one knows how long this situation will last, but this can be extended if necessary.
So, am I eligable?
- You can apply if you’re a self-employed individual or a member of a partnership and you:
- Have submitted your Income Tax Self Assessment tax return for the tax year 2018-19
- Traded in the tax year 2019-20
- Are still trading when you apply, 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
Your self-employed trading profits must also be less than £50,000 and more than half of your income 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 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
If you started trading between 2016-19, HMRC will only use those years for which you filed a Self-Assessment tax return.
If you have not submitted your Income Tax Self-Assessment tax return for the tax year 2018-19, you MUST do this by 23 April 2020. Or alternatively contact us and we can do it on your behalf.
How much will I get?
You’ll get a taxable grant which will be 80% of the average profits from the tax years (where applicable):
2016 to 2017
2017 to 2018
2018 to 2019
To work out the average HMRC will add together the total trading profit for the 3 tax years (where applicable) then divide by 3 (where applicable), and use this to calculate a monthly amount.
It will be up to a maximum of £2,500 per month for 3 months.
They will then pay the grant directly into your bank account, in one instalment.
Sounds good! How do I apply?
HMRC are busy setting up the scheme at the moment. These new systems are pretty complex and will take some time to set up to ensure they work for everyone.
HMRC will contact you if you are eligible for the scheme and invite you to apply online.
Please do not contact HMRC yet. If everyone floods the phonelines it will only further delay the available help as they will have to use precious resources answering the phones instead of working on these new systems.
Don’t forget, there are many individuals taking advantage of this confusing situation at the moment and are using it to scam people. So please, if someone texts, calls or emails claiming to be from HMRC, saying that you can claim financial help or are owed a tax refund, and asks you to click on a link or to give information such as your name, credit card or bank details, it is a scam. Please contact us IMMEDIATELY if this happens.
So what happens after HMRC have been in touch and I’ve applied?
Once HMRC has received your claim and you are eligible for the grant, they will contact you to tell you how much you will get and the payment details with amounts, dates etc.
If you claim tax credits or Universal Credit you’ll need to include the grant in your claim as income.
Please give us a call on 01384 271858 or email us at firstname.lastname@example.org to give you an idea on what you are eligable to claim or if you have any further questions about the process.