If you are self employed or a member of a partnership and your income has been impacted by the coronavirus pandemic, you could be eligible to claim 80% of your average monthly trading profits.
The Self Employment Income Support Scheme grant, which is paid out in a single monthly instalment, covers 3 months’ worth of profits and is capped at a total of £7,500.
The Covid-19 pandemic has hit everyone hard, not least small businesses and partnerships. But there is help available to you in these troubling times.
If you are eligible for the grant, it will not have to be repaid but you must report it on your 2020 to 2021 Self-Assessment tax return. HMRC expects you to make an honest declaration of your financial situation and you must also keep evidence to support your claim.
Are You Eligible to Claim?
If you are eligible to claim, you must make your claim on or before 29 January 2021.
To qualify for the grant, you must reasonably expect your business to be impacted by coronavirus between 1 November 2020 and 29 January 2021. You must either be trading currently with reduced demand due to Covid-19 or you are temporarily unable to trade due to coronavirus.
You can find out more information on how your circumstances affect your eligibility here.
Assessing your Circumstances
In order to make a claim, you should reasonably believe that your business will experience in significant reduction in profits due to the impact of the coronavirus between 1 November to 29 January 2021.You must also keep evidence that demonstrates how your business has been impacted by coronavirus.
HMRC cannot pre-asses this for you because you need to consider your individual and wider business circumstances. If you are struggling to assess the impact that coronavirus has had/ will have on your business, here are some examples that can help you decide.
HMRC works out your eligibility and the grant amount you are entitled to based on your tax returns. First, they will look at your Self-Assessment tax return for the year 2018-2019. Your profits must not be more than £50,000 and at least equal to your non-trading income.
If you are not eligible based on your 2018 to 2019 tax return, HMRC will look at the tax years 2016 to 2017, 2017 to 2018, and 2018 to 2019.
Your eligibility may be affected if:
- Your return is late or amended
- Your tax return is under enquiry
- You are a member of a partnership
- You have had a new child
- You have loans covered by the loan charge
- You claim averaging relief
- You are a military reservist
- You are a non-resident, or you chose the remittance basis
When Can You Claim?
Remember that you must meet all the eligibility criteria to claim the grant. The online service to make your claim is available now. To make a start, visit https://www.gov.uk/guidance/claim-a-grant-through-the-self-employment-income-support-scheme.
Do not forget to have all your important information ready. You will need your:
- Self-Assessment Unique Taxpayer Reference (UTR)
- National Insurance number
- Government Gateway user ID and password
- UK bank details
If you are successful, your grant amount will be paid into your bank account within 6 working days.
Many small businesses are suffering the hardest because of the pandemic. Make sure you claim what is rightly yours. You do not need to suffer alone.
For more advice on everything to do with your finances, make sure you keep checking our blog regularly. We are here to help.