Following the Government statement in relation to support for the Self Employed more details have been released this week to explain how you can ascertain your right to claim the Grant and how you should prepare to make that claim.

If you want to know more detail about the Scheme, follow this link:

www.gov.uk/guidance/claim-a-grant-through-the-coronavirus-covid-19-self-employment-income-support-scheme

1. Introduction

• Self-employed people will shortly be able to apply for a taxable grant of 80% of your average monthly trading profits over the last three years;
• If you are eligible for the Grant you can continue to work, start a new trade or take on other employment;
• Ultimately, HMRC will work out if you are eligible and how much grant you may get – but you can follow these steps to help you understand how HMRC will do this and what you can do now to prepare;

2. Can I Check If I Am Eligible To Claim?

• YES, you can now use an online tool to find out if you are eligible to make a claim;
• Before you try to access the online tool, you will need your:
  • Self Assessment Unique Taxpayer Reference (UTR) number:
    • This will be on all your tax correspondence from HMRC;
    • If you cannot locate the number you find out how to access the details through gov.uk/find-lost-utr-number
  • National Insurance number
    • Again this number will be on all HMRC related correspondence
    • If you cannot locate the number you find out how to access the details through gov.uk/lost-national-insurance-number
  • Once you hold these numbers to hand, you can then enter the online tool by following this link tax.service.gov.uk/self-employment-support/enter-unique-taxpayer-reference

3. HMRC’s Online Tool Says I Am Eligible – What Happens Next?

• After accessing the online tool, it will tell you the date that you will be able to make a claim from and ask you to add your contact details;
• HMRC will use this information to remind you when the online claim service will be available;

4. HMRC’s Online Tool Says I Am Not Eligible – What Can I Do?

• We have reproduced at end of this Advisory Note the eligibility criteria, please review and contact your professional adviser if you have any queries regarding your eligibility;
• If, after reviewing the eligibility criteria, you feel you are eligible for the grant then you can ask HMRC to review this (but only after you have used the online tool).

5. How Much Can I Expect To Get?

• You’ll get a taxable grant based on your average trading profit over the last 3 tax years:
  • 2016 to 2017
  • 2017 to 2018
  • 2018 to 2019
• HMRC will work out your average trading profit by adding together your total trading profits or losses for the 3 tax years, then they will divide by 3.
  • HMRC calculates the grant from its records and at no stage do you have to provide any information about your income
• The grant will be 80% of your average monthly trading profits, paid out in a single instalment covering 3 months, and capped at £7,500 altogether;
• The Scheme may be extended, but currently is limited to 3 months.

6. How Can I Claim If I Am Eligible?

• The online service will be available on a staged basis between 13 May and 18 May 2020:
  • The portal is open on different days for different taxpayers (the day is randomly allocated by HMRC – you cannot accelerate this);
  • You should not need to contact HMRC now to try to advance your claim;
  • Your professional adviser cannot claim on your behalf
• HMRC will advise you the date you can make your claim from;
• In addition to your UTR and NI Number we understand that you will need to hold your:
  • Government Gateway user ID and password – if you do not have a government gateway account, we recommend waiting to create one as the first step of the application process;
  • As an anti fraud measure, you will detail from a P60, payslip or passport;
  • Bank account number and sort code you want HMRC to pay the grant into (only provide bank account details where a Bacs payment can be accepted).

7. When Will The Money Be In My Account?

• HMRC will check the claim and expects to make payments from 25 May 2020 or within six working days of the application being submitted, whichever is the later.

8. After You Have Claimed

• You must keep a copy of:
  • the amount claimed;
  • the claim reference number for your records;
  • evidence that your business has been adversely affected by coronavirus
• You will need to report the Grant:
  • on your Self Assessment tax return;
  • as self-employed income for any Universal Credit claims;
  • as self-employed income and that you are working 16 hours a week for any tax credits claims

9. Am I Eligible?

• You can claim if you’re a self-employed individual or a member of a partnership and:
  • you have traded in the tax year ended 5th April 2019 and submitted your Self Assessment tax return on or before 23rd April 2020 for that year;
  • you traded in the tax year 2019 to 2020;
  • you intend to trade in the tax year 2020 to 2021;
• You must be able to demonstrate that you carry on a trade which has been adversely affected by coronavirus

10. How Will My Eligibility Be Worked Out?

• To work out your eligibility HMRC will first look at your 2018 to 2019 Self Assessment tax return;
• Your trading profits must be no more than £50,000 and at least equal to your non-trading income. You are eligible if:
  • your trading profit was:
    • less than £50,000 in 2018-19 (even if prior year earnings average above £50,000 per annum), or
    • on average less than £50,000 based upon earnings from 2016-17, 2017-18 and 2018-19.
  • at least half your income needs to have come from self-employment as registered on the 2018-19 tax return
    • if this was not the case in 2018/19, then HMRC will take the average of your 2016/17, 2017/18 and 2018/19 tax returns to ascertain eligibility for the Scheme