What is the scheme for?
The Government have announced the Self-employment Income Support Scheme help support self-employed individuals through the current crisis.
There are a few key criteria that must be met in order to access the scheme:
• You must have submitted a tax return for 2018/2019
• Your self employed profits cannot exceed £50,000
• Your self-employment profits must make up more than 50% of your income
The final 2 criteria can be met either in 2018/2019 or an average of 2016/17, 2017/18 and 2018/19
The scheme is open to self-employed individuals and partners. This scheme is not designed to assist Directors of Limited Companies- please see the furlough guidance instead.
How does it work?
HMRC will provide a grant to cover 80% of average monthly profits (subject to a monthly limit of £2,500). The scheme will initially last for 3 months.
If you have been self-employed for the 3 previous tax years, they will collate the 3 years profits to calculate the average monthly earnings. If you have been self-employed for less than 3 years they will use the data available to them.
Crucially you are not required to stop working in this period (this is different from the furloughed employee rules).
How to reclaim?
HMRC will contact you to start the claim. They are not expected to make any payments until June, however, this will be repaid as a lump sum for the 3 months.
If you would like an indication of what we would expect you to receive please contact us on firstname.lastname@example.org. Please note the figures we provide are an indication only and we accept no responsibility should HMRC disagree with this figure.
What’s the small print?
• The grant received is taxable income and will require declaring on your 2020/21 tax return. You also need to declare the grant for the purposes of Tax Credits.
• Funds will not be received until June, to assist businesses HMRC have deferred all July payments on account.
• If you have not yet filed a return for 2018/2019 this must be done so urgently to ensure you qualify. Please contact us ASAP.
• If you have made losses no grant will be awarded, Universal Credit may be an option
I'm the owner and Managing Director of Mollan & Co Accountants. I'm a skilled and efficient accountant with more than 20 years of experience in the industry.
I developed valuable skills in commercialisation through my work in the science and technology department at the Scottish University. Then, in 2002, I formed my own internet-based marketing company, producing and distributing 360° virtual reality tours for the Scottish tourism sector.
I now use my commercial skills, expert tax knowledge and first-hand experience to help other businesses grow and flourish through strong accounting practice.
Our success at Mollan & Co is directly related to the success of our clients.