Self-employment income support scheme: HMRC provides more information in updated guidance

2 mins

Posted on 14 Apr 2020

HMRC has updated its guidance on the self-employment income support scheme.  

The updated guidance indicates that

  • HMRC aims to contact those eligible by mid-May and still aims for payments to be made early June
  • While waiting for the grant, it is possible to apply for Universal Credit  
  • The grant will be subject to income tax and national insurance contributions but does not need to be repaid
  • Anyone receiving the grant can continue to work or take on other employment including voluntary work
  • Anyone claiming will need to confirm to HMRC that their business has been adversely affected by coronavirus. HMRC will use a risk-based approach to compliance
  • To be eligible, trading profits must be no more than £50,000 and must be more than half of the person’s total income for either:
    • the tax year 2018 to 2019 or
    • the average of the tax years 2016 to 2017, 2017 to 2018, and 2018 to 2019
  • The grant will be based on average trading profit over the 2016-2017, 2017-2018 and 2018-2019 tax years
  • Where the person has not submitted self- assessment tax returns for all 3 years, HMRC will work out their average trading profit based on continuous periods of self-employment, which will be either:
    • the tax years 2017 to 2018 and 2018 to 2019 or
    • the tax year 2018 to 2019 only, even if they were self-employed in the tax year 2016 to 2017
  • The grant will be 80% of average trading profit, divided by 12. This give a monthly amount. HMRC will pay this, subject to a maximum of £2,500 per month.

The updated guidance can be viewed here.  

The articles published on this website, current at the date of publication, are for reference purposes only. They do not constitute legal advice and should not be relied upon as such. Specific legal advice about your own circumstances should always be sought separately before taking any action.

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