Friday 27 March 2020
In Monday’s update (23 March) I mentioned that the Self-employed had been widely overlooked in the business support measures being rolled out during this health and economic crisis.
Last night this was addressed by the Chancellor and yet again it leads to questions from clients over whether they qualify for help.
- My simple interpretation of this is that The Government might as well have said “don’t call us, we’ll call you”. HMRC know who will qualify for this financial pay out as these people have submitted 2018/19 tax returns with Self-employment pages completed and have continued to trade into 2019/20. In other words, the pages that relate to carrying on a trade or profession as a sole trader or partnership.
- Sole directors (or Husband & Wife) Limited companies are NOT self-employed.
Details will be published by HMRC in due course.
- It is for sole traders and partners in a business.
- You have filed you 2019 return and are still trading in 2019/20
- The support will be the lower of £2,500 per month or 80% or your reported earnings
- HMRC will look at your last 3 years and average these.
- If you have only traded for 1 or 2 years, these years will be used.
- Your profit reported last year must be less than £50,000, more than that, you do not qualify.
- If you have only just started trading in the current tax year, you do not qualify. Universal credit is available for you.
- This money is expected to be paid in June. Earlier if HMRC can cope with the process.
- The entitlement runs from March, April & May. It will be reviewed if the crisis lengthens.
- In the meantime, Universal credits are all that is available, along with support from landlords, mortgage companies etc.
- Once you receive your grant, this will be taxable income for your 2020/21 return.
If you haven’t filed you 2019 tax return, please do so immediately as HMRC will only consider those returns already submitted and those filed in the next few weeks.
We are here to help.