Please note guidance is constantly changing and this is correct at the time it is written.
The government have launched a scheme to help self-employed who have lost income due to COVID-19. Unfortunately not everyone is eligible.
You will be eligible if you meet the following criteria:
-You have submitted tax returns for the year 18-19
-You have traded this year and are still trading, or would be except for coronavirus
-You will continue to trade
-There is a loss in profits which is directly linked to coronavirus
Even if you meet all of the above criteria, you will not be eligible if your trading profit is over £50,000, you were also employed and your income from this employment is more then half your income or if you have other income aside from your trading profit that is more then 50% of your income from self-employment.
So how is it worked out?
The grant will be based on your trading profit - not your total sales from self-employment, it is very important not to get confused with what figure to use. HMRC will look at your turnover then deduct any allowable expenses and capital expenditure.
HMRC will take the average of your trading profit from; 16-17,17-18 and 18-19, once the average is worked out, they will divide by 12 to give a monthly figure. The grant will be the lower of £2500 or 80% of your monthly trading profit. At the moment HMRC will give a taxable grant for three months, given in one lump sum.
HMRC will contact all those they see as eligible and invite them to apply. For further information and up to date guidance please visit the HMRC page here.
The information featured in this article is for guidance only, no liability is accepted for the opinions it contains.