HMRC has updated its guidance around the circumstances affecting eligibility for the self-employment income support scheme. Those who are self-employed or operate in a partnership may be eligible for support, as the Government continues its efforts to support business throughout the coronavirus pandemic. The new guidance aims to answer some of the most common questions.
Who can claim for self-employment support?
To be eligible for support, you must be a self-employed individual or a member of a partnership. You cannot claim the grant if you trade through a limited company or a trust. You must have traded in tax years 2018/2019 and 2019/2020, and either be currently trading but are impacted by reduced demand due to coronavirus, or have been trading but are temporarily unable to do so due to coronavirus. You must also intend to continue to trade and reasonably believe there will be a significant reduction in your trading profits.
How does HMRC determine my eligibility for self-employment support?
To work out your eligibility, HMRC will first examine your 2018 to 2019 Self Assessment tax return. Your trading profits must be no more than £50,000 and at least equal to your non-trading income. If you’re not eligible based on the 2018/2019 Self Assessment tax return, then tax years 2016/2017, 2017/2018 and 2018/2019 will be considered.
How do partnerships claim for self-employment support?
Each partner in a partnership must make a claim based on their own circumstances. HMRC determines an individual’s eligibility based on their share of the partnership’s trading profits. If the partnership rules require a grant to be paid to the partnership, then the full grant should be paid back to you. Grants of this nature should be recorded and treated as income.
Can I claim self-employment support if I’m newly self-employed?
HMRC rule state that you may be eligible to claim if you submitted your Self Assessment tax return for the tax year 2018/2019 by 23 April 2020. Your eligibility will be determined based on the information in your 2018 to 2019 Self Assessment tax return. If you’re already eligible for the grant based on your 2016 to 2017, 2017 to 2018 and 2018 to 2019 Self Assessment tax returns, then the amount you are eligible to claim will remain the same.
What other support is available to the self-employed?
If you are ineligible for this support then you may be able to claim Universal Credit. HMRC recommends that prospective claimants check how tax credits and other benefits affect each other and consider how the new payments could affect existing benefits. The government is also providing the following help for the self-employed:
- Grants for businesses that pay little or no business rates
- Business Interruption Loan Scheme
- Bounce Back Loan
- Test and Trace support payments
If you have other employment as a director or employee paid through PAYE your employer may be able to get support using the Coronavirus Job Retention Scheme.