How do self employed businesses claim the government funding?

You can claim if you’re a self-employed individual or a member of a partnership and you:

  • have submitted your Self Assessment tax return for the tax year 2018 to 2019
  • traded in the tax year 2019 to 2020
  • are trading when you apply, or would be except for coronavirus
  • intend to continue to trade in the tax year 2020 to 2021
  • have lost trading profits due to coronavirus

 

You will need to confirm to HMRC that your business has been adversely affected by coronavirus. HMRC will as usual use a risk based approach to compliance.

Your trading profits must also be no more than £50,000 and more than half of your total income for either:

  • the tax year 2018 to 2019

the average of the tax years 2016 to 2017, 2017 to 2018, and 2018 to 2019

How much are you entitled to? 

You’ll get a taxable grant based on your average trading profit over the 3 tax years:

  • 2016 to 2017
  • 2017 to 2018
  • 2018 to 2019

To work out the average trading profit we will add together your total trading profits or losses for the 3 tax years then divide by 3.

If you have not submitted Self Assessment tax returns for all 3 years

We will work out your average trading profit based on continuous periods of self-employment, which will be either:

  • the tax years 2017 to 2018 and 2018 to 2019
  • the tax year 2018 to 2019 only, even if you were self-employed in the tax year 2016 to 2017

The grant will be 80% of your average trading profit, divided by 12 which will give a monthly amount. We will pay this or up to a maximum of £2,500 a month, whichever is lower.

When can you make the application?

You cannot make a claim yet.

HMRC will aim to contact you by mid May 2020 if you’re eligible for the scheme and invite you to claim using the GOV.UK online service. If you’re unable to claim online an alternative way to claim will be available. We will update this page with more information soon.

And when will the government give you the money?

Once HMRC has received your claim and your grant is approved, they will contact you to tell you how much you’ll get and the payment details.

 

 

Article written by Salford chartered accountants www.salfordcharteredaccountants.co.uk