The Spring Budget on 3rd March revealed a few details about the next stage of the self-employment grant.
Whilst we are still waiting for further details the most striking (and welcome) difference between this grant and previous versions is that this one will be available for those who were not trading in 2018/19 and only started their business in 2019/20.
Here’s what we know so far:
What is available?
Self-employed individuals may be able to claim a cash grant of 80% of three months’ average trading profits, capped at £2,500 per month.
The grant will be subject to tax and national insurance.
You can continue to work or take on other employment whilst claiming the grant.
Who can claim?
To make a claim you must be self-employed and
- Have submitted a self-assessment Tax Return for 2019/20 by 2 March 2021
- Have traded in the 2019/20 and 2020/21 tax years
- Be temporarily unable to trade due to coronavirus OR if you are able to trade then you are impacted by reduced demand due to coronavirus
HMRC will first consider your 2019/20 Tax Return and your profits for this year must be:
- No more than £50,000
- At least equal to your non-trading income
If you are not eligible based on your 2019/20 then HMRC will consider your position on average for the four tax years 2016/17, 2017/18, 2018/19 and 2019/20.
You will also need to declare that:
- You intend to continue to trade
- You reasonably believe that there will be a significant reduction in your trading profits due to reduced business activity, capacity, demand or inability to trade due to coronavirus.
How can I claim?
Claims can only be made using an online service that HMRC will provide. This will be available from late April 2021 until 31 May 2021.
HMRC will contact you in mid-April if they believe you may be eligible to make a claim. They will provide you a date from which you can make your claim.
Please don’t assume that if HMRC contact you then you must be eligible to make a claim. HMRC will not be aware of your current circumstances so you must check that you do meet all of the eligibility criteria before making a claim.
How much can I claim?
We don’t have any specific details as to how the three months’ average profits will be calculated for this fourth grant. However, it is likely to be similar to the methods for previous grants, bearing in mind that the 2019/20 year will now have to be taken into account.
