Latest Update from HMRC on Business Support for Covid 19

Self-employment Income Support Scheme FAQs directly from HMRC here,

These are HMRC responses not mine

 

Frequently Asked Questions

What happens to individuals whose 2018/19 profits are very different to what they would have expected to make this year?

The government can only act on the most recently available data. This is from the 2018/19 tax year.

To try to provide the most accurate possible estimate of self-employed income, we can look at average profits over 16/17, 17/18 and 18/19.

What about those who haven’t filed their 2018/19 tax return yet?

The scheme is for those who have filed a tax return to report income from self-employment in the tax year 2018-19.

For eligible individuals who have not submitted their returns for 2018-19, they will have 4 weeks’ notice from the announcement to file their returns, until 23 April 2020, and therefore become eligible for this scheme.

Is this grant subject to tax?

Yes – individuals will pay Income Tax and National Insurance on any payments received through this scheme as they are replacement for income in line with normal practice for benefits or grants that replace income.

The grant is recognised as income for the purposes of Universal Credit and Tax Credits and may impact the amount claimants are entitled to.

What should self-employed people do while they wait to be paid? 

In the interim, self-employed individuals may be eligible for universal credit.

The government has provided over £6.5bn of additional support through the welfare system for those affected by Covid-19. Further information on how to access this support can be found here.

Why is this scheme limited to those who with trading profits below £50,000? For many, higher incomes might mean higher losses at this time.

In order to target support at those most in need, the government has chosen to cap this scheme.

For all those with trading profits of £50,000 and over, the mean self-employment income is £186,000 and the mean total income is £217,000.

Those with higher average incomes are more likely to have access to savings and other resources.

They may also still be able to access support through the temporary Coronavirus Business Interruption Loan Scheme.

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