Self-employed people who run their businesses as sole traders or partnerships can receive a grant equivalent to 80% of trading profits for up to three months. This is subject to maximum of £2,500 per month.
Who can apply?
You can apply for the grant if you run your business as a sole trader or a partnership and you:
- Submitted a tax return for the 2018-19 tax year
- Were trading in 2019-20
- Continuing to trade now (or would be if not for the covid outbreak)
- Have suffered financially because of the outbreak
You must also satisfy ONE of the following conditions:
- Trading profits of less than £50,000 in 2018-19, or
- Average trading profits of less than £50,000 over the three years above
In all cases, your self-employed income must make up more than 50% of your total taxable income.
Who cannot apply?
You are ineligible for the grant if you:
- Operate your business as a limited company
- Your business is chiefly concerned with the letting of your own property
- Annual trading profits (or average) exceeds £50,000
How much will you get?
The calculation is fairly simple. First you’ll need to know your trading profits for the years 2016/17, 2017/18 and 2018/19. You should be able to get this figure either from your Profit & Loss Account or, if you use HMRC online to file your tax return yourself, it’s the figure on box 31 of the self-employed page of your tax return. Once you have this figure, divide it by three to get the annual average, and then divide this figure by twelve to get the monthly average. If the result is less than £2,500, then you multiply this by three to get your grant amount. If the result is more than £2,500, then the grant will be £7,500.
Please note that this assumes the grant award will be for three months only. There is potential for this to be extended.
How to apply
Understandably, given the timescales, the application process has not yet been finalised. HMRC will automatically identify and contact those traders who are eligible and invite them to apply online. Once you’ve applied, HMRC will confirm how much you are entitled to and will pay it out in one single instalment. We anticipate that this will be sometime in June 2020.
If you have any questions about the scheme, please email email@example.com or call us on 03330 166559. Our advisers are available during normal office hours to respond to any queries.