As many self-employed amongst you prepare to make your claim for the Government announced Income Support Scheme, we have created this guide to help you expediently submit the required information.
Who can make a claim and what is the criteria?
- The self-employed (including members of LLPs/Partnerships).
- Must have been trading pre 2019/20 tax year.
- Must be continuing to trade or indeed would be but for coronavirus.
- Must have full intentions to trade in the 2020/21 tax year.
- If you receive a grant you can continue to work, start a new trade or take on other employment.
- Trading profits must have been adversely affected by COVID-19. Please note that HMRC will be carrying out risk assessment checks in this respect. If you have diversified your trade due to coronavirus it may be sensible to account for this separately.
- You must have submitted your 2018/19 Self-Assessment Returns by 23rd April 2020, an exception is given for those who are caught by the loan charge issue.
- Your trading profits must be no more than £50,000 and be more than half of the individual’s total income for either:
- The 2018/tax year
- The average of the tax years 2016/17, 2017/18 and 2018/19.
9. The claim, if eligible, will be 80% of the trading profit (up to a maximum of £2,500 per month).
10. This scheme is currently set to run for 3 months but may be extended.
11. You should not claim for this scheme if you are above the state aid limit. In 98% of cases this is unlikely to be the situation, as the state aid limit is very high.
12. Trades operated through a Trust cannot claim.
13. If you are a member of a partnership and the partnership agreement states the grant has to be paid into the partnership pot, then the grant has to be allocated to the claimant and nobody else.
14. If you are a non-UK resident or are a resident and claim on the remittance basis then you may be able to claim under SEIS. You will need to confirm to HMRC that your UK trading profits are at least equal to your other worldwide income.
What is meant by adversely affected?
Those whose businesses have been adversely affected by COVID-19 will have to be scaling down to have stopped trading because:
- The supply chain has been interrupted
- You have fewer or no customers
- Staff are unable to come to work
What are Trading Profits?
Trading profit is the total trading income minus:
- Allowable business expenses
- Capital allowances
- Flat rate expenses
- Trading allowance
- Qualifying care relief (i.e. foster carers)
What information will be required for the claim:
- The unique taxpayer’s reference number
- National Insurance number
- Government Gateway ID and password
- Bank account and sort code
What records will need to be kept?
- Keep a copy of the amount claimed
- The claim reference number
- Evidence that your business has been adversely affected
Please do not contact HMRC directly, they currently aim to contact any eligible self-employed by mid-May 2020. We believe this contact to be made via your Personal Tax Account (PTA). If you do not have a PTA then we suggest you set one up immediately as your Accountant will be unable to claim on your behalf.