Coronavirus Government HMRC Self-Employed Grant Scheme

If you are a foster carer or self-employed and need help, you can claim a grant through the COVID-19 Self-employment Income Support Scheme from the Government. You can use this scheme if you are self-employed and have lost income due to the coronavirus.

If you are a Foster Carer, you can find more detailed guidance in our guide How To Claim Government Coronavirus Income Support As A Foster Carer

Contact us for assistance, we can calculate what you are eligible to receive under the scheme and advise you on your benefits entitlement whatever your situation. Contact us on 0121 794 2289 or e-mail  tax@intellectbiz.com

COVID 19 – Help For The Self-Employed- Guidance Issued 26.3.2020

This document summarises the main points in the government’s plans to support the self -employed announced 26.3.2020.

Who can apply for government assistance?

The self-employed or members of a partnership who:

  • Have submitted a 2018-19 tax return
  • Have traded in 2019-20 tax year
  • Are trading now (or would be except for COVID-19)
  • Intend to continue trading in 2020-21
  • Have lost trading profits due to COVID-19
  • Profits must be less than £50,000 and more than half of your income from self-employment which is determined by one of the following being true:
  • Having average trading profits in 2018/19 of less than £50,000 and these profits constitute more than half of your total taxable income
  • Having average trading profits in 2016/17,2017/18 and 2018/19 of less than £50,000 and these profits constitute more than half of your average taxable income in the same period

If you started trading between 2016 and 2019 HMRC will only use those years for which you filed a self-assessment tax return.

If you have not filed your 2018-19 tax return you must do so by the 23rd April 2020.

What Tax Years Are Applicable?

You will get a grant of 80% of the average profits from the tax years applicable:

  • 2016-17
  • 2017-18
  • 2018-19

To work out the average profit HMRC will add together y=the total trading profit for the 3 tax years (where applicable) and divide by 3 and use this to calculate a monthly amount.

The grant will be up to a maximum of £2500 per month for 3 months. The money will be paid directly to your bank in one installment.

How to apply:

You cannot apply for the scheme. HMRC will contact you and invite you to apply. Do not contact HMRC – they will contact you.

If anyone texts, calls or e-mails you claiming to be from HMRC saying they can get you a refund or grant asking you to click on a link, etc it is a scam.

Once you have applied, HMRC will contact you and tell you how much you will get and the payment details.

Grants received must be included in tax credits claims as income.

 

Examples of application of regulations

Example A

Jack is a consultant and his tax returns for the last three years show the following

Self Employment 2018/20192017/182016/17
Income25,00028,00022,000
Expenses(11,000)(12,000)(8,000)
Profit14,00016,00014,000
Other Income000

 

Average Profit: £14,667

80% of Average: £11,733

Per Month: £978

3 Months Profit: £2,934

 

As Jack has no other income, he should be eligible for the grant and should receive £2,934 in due course.

If Jack has other income in excess of £14,000 2019, £16,000 2018, or £14,000 2017, he will not be eligible for any refund.

 

Example B: Jack Is A Foster Carer

Jack is a Foster Carer with two foster children in long term placement –his income is £360 per week per child and the children we both over 11 on 6.4.16.

Self-Employment2018/192017/182016/17
Income37,44037,44037,440
Allowances(36,000)(36,000)(36,000)
Profit1,4401,4401,440

 

Average profit over 3 years  = £1,440

3 months   =  £480

If the carer has no other taxable income, they will receive £480 in due course.

If the carer has taxable income in excess of £1,440, they will not be eligible for the refund.

Remember HMRC will contact you there is no point in calling them.

If anyone does call you offering refunds it is a scam, read more information on phishing scams here.

How Intellect Tax Can Help

If you need your 2018-19 tax return prepared to meet the 23/4/2020 deadline call us and take advantage of our fixed fee service (£175 inc vat).

We can calculate what you are eligible to receive under the scheme.

We can advise you on your benefits entitlement whatever your situation.

If you are a Foster Carer, please read our self-employed cares guide to COVID-19.

Call us on 0121 794 2289 or e-mail  tax@intellectbiz.com