Here's how to claim a self-employed coronavirus grant through the UK government's Income Support Scheme

Tuesday, 2nd June 2020, 10:21 am
Updated Tuesday, 2nd June 2020, 10:21 am

In March, Chancellor Rishi Sunak unveiled emergency financial measures to help self-employed workers impacted by the coronavirus pandemic.

The Chancellor said that self-employed people who are facing financial difficulties due to the ongoing health crisis will have 80 per cent of their wages covered by the government.

The financial package, which promises help for groups such as builders, taxi drivers, hairdressers, and childminders, comes after the Government faced widespread criticism for not protecting the sector sooner.

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Here's how it all works:

How does the scheme work?

The Chancellor announced that self-employed workers will be able to access a taxable grant that is worth 80 per cent of their average monthly profits over the last three years, up to the value of £2,500 per month.

The scheme currently allows you to claim a taxable grant worth 80% of your average monthly trading profits, paid out in a single instalment covering 3 months’ worth of profits, and capped at £7,500 in total.

If you’re eligible for this first grant (eligibility details can be found below), you must make your claim on or before 13 July 2020.

The scheme – initially announced to be available for three months – has now been extended, with the Chancellor announcing that those who are eligible will be able to make a claim for a second and final grant in August 2020.

That second grant will be worth 70% of your average monthly trading profits, paid out in a single instalment covering a further 3 months’ worth of profits, and capped at £6,570 in total.

Do I have to pay back the grant?

The grant covers the same amount of income as the government has offered for furloughed employers, who have also been offered a grant worth 80 per cent.

The grant will be subject to Income Tax and National Insurance contributions, but does not need to be repaid.

Who is eligible for the scheme?

You can claim if you’re a self-employed individual or a member of a partnership and you:

  • have submitted your Self Assessment tax return for the tax year 2018 to 2019
  • traded in the tax year 2019 to 2020
  • are trading when you apply, or would be except for coronavirus
  • intend to continue to trade in the tax year 2020 to 2021
  • have lost trading profits due to coronavirus

You will need to confirm to HMRC that your business has been adversely affected by coronavirus. HMRC will as usual use a risk based approach to compliance.

For more information on eligibility, head to the Government's website

When will the scheme be available?

The online service you should use to claim was made available in May. You can access the service here.

If you’re eligible for this first grant (eligibility details can be found below), you must make your claim on or before 13 July 2020.

HMRC say they hope to make payments "within 6 working days" if your claim is approved.

The online service for the second and final grant is not available yet. We will update this page when it become available.

How much will I get?

You’ll get a taxable grant based on your average trading profit over the 3 tax years:

  • 2016 to 2017
  • 2017 to 2018
  • 2018 to 2019

To work out the average trading profit, HRMC will add together your total trading profits or losses for the three tax years, then divide by three.

If you have not submitted Self Assessment tax returns for all 3 years, HRMC will work out your average trading profit based on continuous periods of self-employment, which will be either:

  • the tax years 2017 to 2018 and 2018 to 2019
  • the tax year 2018 to 2019 only, even if you were self-employed in the tax year 2016 to 2017

The grant will be 80% of your average trading profit, divided by 12 which will give a monthly amount. The Government will pay this or up to a maximum of £2,500 a month, whichever is lower.

The grant will be paid directly into your bank account in one instalment.

For more information on the Self-employment Income Support Scheme, head to the Government's website