Support for the self-employed goes live

Although there has been a lot of focus on the furlough scheme for employees, the self-employed can now benefit from government support too. NIGEL WOODWARD, our tax specialist, takes a look at the details.

In recent months, the government has announced support schemes, loans and grants for businesses which are struggling with all the economic uncertainty and lost revenue that has resulted from the coronavirus lockdown. Initially, many self-employed people felt they were 'left in the lurch', as they weren't in a position to benefit from the furlough scheme available to company employees.

Thankfully, this anomaly has been addressed. In addition to the deferral options for self-assessment tax payments, Chancellor Rishi Sunak announced the Self-Employed Income Support Scheme (SEISS), which has recently opened. Essentially, it offers the same support received by furloughed employees under the Coronavirus Job Retention Scheme, backdated to March.

Some frequently asked questions

How does the scheme work?

If you're self-employed, you can claim a taxable grant to the value of 80% of your trading profits, up to a cap of £2,500 per month. As with the furlough scheme, you will not have to repay the funding.

Is it backdated?

Yes. The scheme is backdated to the beginning of March and is designed to cover the three month period to the end of May. You will receive the funding from 25^th May if approved.

I started my business after April 2019. Can I claim?

No. Unfortunately, you will miss out on the entitlement.

I have a limited company and pay myself in dividends. Am I covered?

Again, sadly no, as you are not self-employed. If you're a company director who relies on dividends, you're not going to be able to claim under this scheme, although there may be other help available. Contact our team to find out more.

Can my accountant complete my application?

No. You must complete the application yourself, although we can advise on the process and assist in producing any supporting information you require. We can also assist you with setting up your Government Gateway user ID, check the amount of grant paid and liaise with HM Revenue & Customs on your behalf regarding any queries resulting from the claim; for example with regard to the eligibility or the amount of grant paid.

What details will I need to make a claim?

First of all, you will need a working Government Gateway ID. You will then be expected to provide:

• A Self-Assessment Unique Taxpayer Reference (UTR),
• Your National Insurance number
• Your tax return for 2018-19 must have been submitted to HMRC by 23 April 2020
• Confirmation that you have been trading in the 2018/19 and 2019-20 tax years and that you expect to continue trading in 2020/21
• Confirmation that your business has been adversely affected due to Coronavirus, as evidence of this may be required at a later date
• Confirmation that your trading profits are less than £50,000, which make up more than half of your total income, although HMRC will already have this information to hand
• Your bank account details

Once you have all of the above information to hand, you can complete the application process here.

When you receive the grant, it's essential that you let your accountant know so that he has a record of the amount claimed, together with the associated reference number. This grant will need to be reported on self-assessment tax returns and may affect Universal Credit or Working Tax Credit claims.

Find out more by contacting the team here at Page Kirk on 0115 955 5500 or emailing us at enquiries@pagekirk.co.uk