The government has confirmed that the self-employed will receive financial support if their business has been affected by coronavirus. Are you eligible and how can we help you?
Who can get the grant? Self-employed individuals or members of a partnership are eligible for a grant representing up to 80% of their average profits if they meet the following criteria:
- they submitted a tax return for 2018/19
- their business traded during 2019/20
- their business is continuing to trade, or would be except for coronavirus
- they intend to continue trading in 2020/21
- they have lost trading/partnership trading profits due to coronavirus
- their trading profits are less than £50,000 and represents more than half of their taxable income.
How is the £50,000 threshold applied?
First, you should check the trading profits declared on your client’s 2018/19 tax return. If the amount is less than £50,000 and it makes up more than half of their taxable income, then this condition is met. If not, you should check whether their average profits for tax years 2016/17 to 2018/19 is less than £50,000 and accounts for more than half of their average taxable income during this time. If it does, then they meet this requirement.
How much will they be paid?
Individuals will get a taxable grant which will be 80% of the average profits from the tax years 2016/17 to 2018/19. If they became self-employed during those years, HMRC will use the average for the years they submitted tax returns for. The maximum amount is £2,500 per month for three months, so to get the full amount your client would need to have average profits of £37,500 per annum.
How do you apply?
HMRC will contact you if you are eligible for the scheme and invite them to apply online using GOV.UK. In the meantime, your clients are likely to need help checking whether they are eligible for this scheme and calculating the amount they should receive.
What to do next
If you need help checking whether you are eligible for this scheme or calculating the amount you should receive then contact us at 01332-369999 or via our contact sheet on the website http://www.milestone-solutions.co.uk