Self-Employment Income Support Scheme

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Update: Extension of the Self-Employed Income Support Scheme

The Self-Employment Income Support Scheme has been extended.

The scheme has been extended. If you were not eligible for the first and second grant based on the information in your Self Assessment tax returns, you will not be eligible for the third.

HMRC expects you to make an honest assessment about whether you reasonably believe your business will have a significant reduction in profits.

To make a claim for the third grant your business must have had a new or continuing impact from coronavirus between 1 November 2020 and 29 January 2021.

The third taxable grant is worth 80% of your average monthly trading profits, paid out in a single instalment covering 3 months’ worth of profits, and capped at £7,500 in total.

Applications for the third grant will open from 30 November 2020. Make your claim from the date we give you either by email, letter or within the service. If you’re eligible, you must make your claim for the third grant on or before 29 January 2021.

The grant does not need to be repaid if you’re eligible, but will be subject to Income Tax and self-employed National Insurance and must be reported on your 2020 to 2021 Self Assessment tax return.

You must keep evidence to support your claim.

Who can claim

To be eligible for the third grant 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.

If you claim Maternity Allowance this will not affect your eligibility for the grant.

You must have traded in both tax years:

  • 2018 to 2019 and submitted your Self Assessment tax return on or before 23 April 2020 for that year
  • 2019 to 2020

You must either:

You must also declare that:

  • you intend to continue to trade
  • you reasonably believe there will be a significant reduction in your trading profits

Reasonable belief

In order to claim, you must reasonably believe that you will suffer a significant reduction in trading profits due to reduced business activity, capacity or demand or inability to trade due to coronavirus during the period 1 November to 29 January 2021. You must keep evidence that shows how your business has been impacted by coronavirus resulting in less business activity than otherwise expected.

Significant reduction

Before you make a claim, you must decide if the impact on your business will cause a significant reduction in your trading profits for the tax year you report them in.

HMRC cannot make this decision for you because your individual and wider business circumstances will need to be considered when deciding whether the reduction is significant.

You should wait until you have a reasonable belief that your trading profits are going to be significantly reduced, before you make your claim.

There are some examples that can help you decide.

How to claim

The online service for the third grant will be available from 30 November 2020.

You must make your claim on or before 29 January 2021.

You should contact HMRC if you receive any suspicious texts, calls or emails claiming to be from HMRC as this may be a scam.

Original Self-employment Income Support Scheme article:

 

What you will need to apply for Self-Employment Income Support Scheme

You will need your:

  • Self Assessment Unique Taxpayer Reference (UTR)
  • National Insurance number
  • Government Gateway user ID and password – if you do not have a user ID, you can create one when you make your claim
  • UK bank details (only provide bank account details where a Bacs payment can be accepted) including:
    • bank account number
    • sort code
    • name on the account
    • your address linked to your bank account

How to claim for the scheme

You can claim through the online service, HMRC will contact you if you’re eligible.

HMRC will check claims and take appropriate action to withhold or recover payments found to be dishonest or inaccurate. If you know you’ve been overpaid or are not eligible for the grant and do not tell HMRC you may have to pay a penalty.

After you’ve claimed

HMRC will check your claim and pay your grant into your bank account in the next 6 working days.

If your business recovers after you’ve claimed, your eligibility will not be affected. You must keep evidence to confirm your business was adversely affected at the time you made your claim.

If you think you were not eligible for the grant or have been overpaid

Tell HMRC and pay back the Self-Employment Income Support Scheme grant if, when you made the claim you:

  • were not eligible for the grant
  • received more than we said you were entitled to

When you must tell HMRC depends on the date you received your grant.

If you received the grant:

  • before 22 July 2020 you must tell HMRC on or before 20 October 2020
  • on or after 22 July 2020 you must tell HMRC within 90 days of receiving the grant

If you do not you may have to pay a penalty.

Find out more about when you may have to pay a penalty and other information, including:

  • how HMRC decides how much the penalty will be, which could be up to 100% of the grant amount
  • when you will not have to pay a penalty
  • how to appeal against a penalty

You can also tell HMRC if you want to voluntarily pay back some or all of the grant you received. You can do this at any time. For more advice you can also contact us.

Tom McManners
Tom McManners BSc ACA ACMI

Tom is a Chartered Accountant and Senior Statutory Auditor. He is also the Director at Treetops. For more accounting advice please call or complete our website contact form:

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