Self-Employment Income Support Scheme

Support provided by HMRC

What does this involve?

You can now apply for the third instalment of this grant. You must make your claim between 30 November 2020 and 29 January 2021.

This will provide a taxable grant covering 80% of average monthly trading profits. It will be paid out in a single instalment covering 3 months’ worth of profits, and capped at £7,500 in total.

The next instalment will cover a three-month period from 1 February 2021 until 30 April 2021. The Government will review and set the level of this grant in due course.

The grants are taxable income and also subject to National Insurance contributions.

Am I eligible?

To be eligible for the Grant Extension self-employed individuals, including members of partnerships, must:

  • have been previously eligible for the Self-Employment Income Support Scheme first and second grant (although they do not have to have claimed the previous grants)
  • declare that they intend to continue to trade

In addition to this, they must be either:

  • currently actively trading but are impacted by reduced demand due to coronavirus
  • previously trading but are temporarily unable to do so due to coronavirus

Those who are eligible for the Self-Employment Income Support Scheme must be self-employed or a member of a partnership.

You must also meet these criteria:

  • you traded in the tax year 2018 to 2019 and submitted your Self Assessment tax return for that year on or before 23 April 2020
  • you traded in the tax year 2019 to 2020
  • you intend to continue to trade in the tax year 2020 to 2021
  • your trade has been adversely affected by coronavirus

Your business could be adversely affected by coronavirus if, for example:

a) you’re unable to work because you:

  • are shielding
  • are self-isolating
  • are on sick leave because of coronavirus
  • have caring responsibilities because of coronavirus

b) you’ve had to scale down or temporarily stop trading because:

  • your supply chain has been interrupted
  • you have fewer or no customers or clients
  • your staff are unable to come in to work

Your trading profits must be no more than £50,000 and at least equal to your non-trading income (that is, any income from sources other than your trade).

If you’re not eligible based on your 2018 to 2019 Self Assessment tax return, HMRC will look at the 2016 to 2017, 2017 to 2018, and 2018 to 2019 tax years.

What does this cost?

This is a free service.

Who is this for?

Self-employed individuals or members of a partnership are eligible.

How long does this take?

Once you’ve submitted your claim, you will be told straight away if your grant has been approved.

The grant will be paid directly into your bank account within 6 working days.

Important information

To work out your eligibility, HMRC will look at your 2018 to 2019 Self Assessment tax return first.

If you’re not eligible based on your 2018 to 2019 Self Assessment tax return, HMRC will look at the 2016 to 2017, 2017 to 2018, and 2018 to 2019 tax years.

In this case, the amount of your grant will be based on your average trading profit over these three tax years. HMRC will calculate your average trading profit by adding together your total trading profits or losses for each of the three tax years, then dividing by three.

If you receive a grant you can continue to work, start a new trade or take on other employment, including voluntary work or duties as an armed forces reservist.

The grant is subject to Income Tax and self-employed National Insurance.

Your tax agent or adviser cannot make the claim for you. You must make the claim yourself. If you use an agent you should contact them if you need any help or support.

If you’re eligible, HMRC will let you know the date you’ll be able to make a claim from and ask you to add your contact details. You'll then get a reminder when the online service becomes available.

Next steps

Visit the UK Government website for more information.

Support provided by HMRC

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