This information is correct as of 29 March 2020, 09:30, and is subject to change due to the dynamic nature of the current situation.
On 26 March 2020, the Chancellor announced support for self-employed individuals due to the ongoing coronavirus (Covid-19) pandemic.
The scheme will only cover you if you can say yes to the below:
- You have submitted a tax return in the 2018/19 Financial Year
(this is the period from 6 April 2018 – 5 April 2019 and was due for submission before 31 January 2020)
- You are still trading during the 2019/20 Financial Year, and intend to continue trading
(so have been self employed during the current financial year – 6 April 2019 – 5 April 2020 – and plan to continue into 2020/21)
- Lost profits or income due to Covid-19
(this would be as your group has closed)
- You have profits of less than £50,000 for the 2018/19 Financial Year
(check your last tax return – if the profit (the amount you pay tax on) was less than £50,000 you are eligible for this check)
- Your profits (when averaged) over the past three years (2016/17, 2017/18 and 2018/19) are less than £50,000
- Self Employment must be your main income.
(If you are employed and the income from employment is higher than your self employment, you are not eligible)
If you cannot say yes to all of the items above, you are not eligible for this scheme.
How much will I get?
HMRC will use the average profits for the last 3 tax returns.
If you have not submitted the last 3, and only have the last one (18/19), HMRC will use this figure – this is where the ‘applicable’ items appear in the next sentence.
To work out the average, HMRC will add together the total trading profit for the last 3 tax years (where applicable) and then divide by 3 (where applicable).
80% of this is payable under the grant.
Matt became a consultant in 2014.
He meets all of the eligibility criteria and has the below profits:
– 2016/17: £3,000
– 2017/18: £8,000
– 2018/19: £15,000
HMRC would add up the total profits (£26,000) and then divide by the number of years available (3) to reach an average profit of £8,666.66.
This would then be divided by 12 to reach a monthly amount £722.22.
80% of this is £577.77. This would be the grant payable per month.
Claire became a consultant in 2018.
She meets all of the eligibility criteria but only has the 2018/19 tax return submitted as she began consultancy during this year. Her profit is below
– 2018/19: £6,000
HMRC would use the number of years available to calculate an average annual profit. In this case, it’s £6,000.
This would then be divided by 12 to reach a monthly amount £500.
80% of this is £400. This would be the grant payable per month.
Note: This figures are based on the current announcement and only an indication – these may change depending on your circumstances.
How to apply for the grant
It’s not possible to apply for the grant at this time. HMRC will contact you if you are eligible for the scheme, and invite to you apply online. You should not contact HMRC to apply as they cannot help, and this will delay the introduction of the scheme and setting up of the background systems.
IMPORTANT: HMRC will never contact you by email, a call or text message, it will always be in writing. Any applications will be made through the official gov.uk website – be careful to avoid any scams which will be high in volume during this time.
What happens after applying?
HMRC will process your claim and if eligible, they will contact you to make payment. If you are eligible, any amount will be back-paid to March 2020.
Any amount received as a grant is taxable, and will need to be declared on your applicable tax return.
Questions and Answers
Although everyone’s situation is different, we’ve collated a number of questions and answers below from our Facebook group discussions and our live videos.
Can I still run my Virtual Group?
Yes, the Chancellor confirmed that you can still work whilst receiving the grant
Does the grant need repaying?
No. The grant is a payment to you from the government, and will need to be logged as income on your business accounts.
This is separate to your business accounts spreadsheet as it is a benefit/grant (therefore should not be included in the spreadsheet).
It is should be included on your tax return for the 20/21 financial year in the relevant section. The grant is taxable.
Can I take paid employment?
The Chancellor advised that you can continue to work. As long as any work is less than your self employed earnings during the financial year, you can take employment.
What about the support package (weekly pay) from Slimming World?
On 17 March 2020, Slimming World confirmed that they would support consultants for the next three weeks from the point when your group closes. This income should be logged on your accounting spreadsheet under the ‘income’ section.
Take care to adjust your PFS numbers if you did not pay Slimming World any fees during the period.
Do I need an accountant to claim the grant?
No. You will need to claim the grant yourself, and HMRC will write to you if eligible
I started after 6 April 2019, however haven’t yet submitted my first tax return, am I eligible?
No. The Chancellor advised that only those who have submitted their 2018/19 tax return (at least) are eligible for this scheme. You may be eligible for other benefits.
What if I already receive Universal Credit (UC), Child Benefit, other benefits, etc?
These will be taken into account when you complete your next tax return and may be claimed back by the government depending on your individual circumstances. It’s not possible at this time to confirm how much that would be.
I’ve had a text / email / call from HMRC to say my refund is ready
Do not answer, reply or click any links. HMRC never send any communication this way, and it’s likely to be a scam. Only official documentation from HMRC is by post or direct to your Gov.UK Account