Director
Ria-Jaine Accounts
The government have released details of the Self-employment Income Support Scheme and below is some information on the support and some of the key points for sole traders.
If you are a sole trader or part of a partnership and have lost income due to COVID-19 this is the scheme for you.
The scheme will be live in June 2020 and HMRC will make contact Mid May 2020 with the aim to release payments early June. The scheme will provide sole traders with the option to claim a taxable grant worth 80% of trading profits and capped at £2,500 and is available for 3 months but may be extended.
Individuals are able to claim universal credit whilst they wait for the grant but do be mindful that this will end any current tax credits that you receive and they will be replaced with Universal Credit. An advanced payment may be available for those that are eligible for Universal Credit and this will help in the short term.
1. You must have submitted a 2018/19 tax return, if you are late submitting you have until 23rd April 2020 to do this.
2. You must have traded in the 2019/20 tax year and be trading when you apply (or would be except for Covid-19)
3. You must intend to trade in the 2020/21 tax year.
4. Your trading profits must be no more than £50,000, and more than half of your total income for either
2018/19 tax year
Average of the tax years 2016/17, 2017/18 and 2018/19
5. The grant will be subject to Income tax and national insurance.
6. The grant does not need to be repaid.
7. The grant will be treated as self employed income and may affect universal credits once received but earlier periods will not be affected.
8. You can continue to work if you receive the grant.
9. If you in employment you may be able to seek support via the job retention scheme.
You can see how HMRC will work out your eligibility here if you haven’t submitted tax returns for all the three years.
HOW TO CLAIM
You cannot claim yet.
HMRC will aim to make contact by Mid May 2020 if you are eligible for the scheme and will invite you to claim using the GOV.UK online service. Guidance is being updated on a regular basis.
Friendly disclaimer: The information contained in this article is for guidance and information purposes only. It should not be relied upon as full and complete accounting, tax or legal advice. For specific advice relevant to your own situation please speak to Ria-Jaine MAAT or another professional direct.
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If you are looking for podcasts then do check out my interview with the amazing Carl Reader on his The Carl Reader Show’ – Ria-Jaine Raw & Uncut.
and another podcast with Katie Godfrey, owner of KG salon, KG franchise and Lash training academy on ‘The Life Of KG’ – Guest Ria-Jaine
