The government has now issued guidance on the above grant. We have summarised the main points below, but some of these may be changed before the scheme goes live. If this happens, we will endeavour to keep you updated. The scheme will allow you to claim up to 80% of your monthly trading profits, paid in one instalment for the three months starting in March, up to a maximum of £7,500. Grant money received will be treated as taxable income, meaning that you will pay National Insurance and Tax on the amount received.
Not everyone is eligible for the grant. To be eligible you must:
Be self-employed or in a partnership. This means that you must have completed the self-employment pages of the tax return. This excludes directors and those who receive property income.
Have submitted your 2018-2019 Tax Return before 23 rd April 2020. If you have amended your tax return after the Chancellor’s announcement in March only the original tax return will be included.
Have traded in the 2019-2020 tax return and be planning to continue trading.
Have profits per year that are no more than £50,000 in the 2018-2019 tax year or no more than £50,000 as an average over the three years from 2016-2017. Losses made in a trading year will be included in the calculation.
Have non-trading income which is not more than your trading income. Non-trade income includes employment, pension income, property income, dividends and savings income.
Have been adversely affected by the Corona Virus pandemic.
This last point is important as HMRC have indicated that they will investigate anyone that they believe have not financially suffered. They have given guidance on what they believe ‘adversely affected’ means and have provided the following examples:
You are shielding, self-isolating or on sick leave
You have caring responsibilities because of the virus
You have been forced to stop trading
You have had to scale down because your suppliers are not trading, or you have no customers
We do not know what proof they will be seeking but you should be careful to document how the virus has affected your business and ensure that your turnover and profits can be shown to be significantly reduced.
How to check if you are eligible
HMRC have provided an online tool where you can check if you are eligible. To do this you will need your UTR (Unique Tax Reference) number which is shown on your tax return and on some letters from HMRC and also your National Insurance number. If you do not have this information or don’t have access to a computer, you can ask us to do this for you for which we will make a small charge.
The tool can be found here: https://www.tax.service.gov.uk/self-employment-support/enter-unique-taxpayer-reference
If you are told by HMRC that you are not eligible, they will advise you how you can make an appeal if you believe they are wrong. If you are told by HMRC that you are eligible they will let you know the date from which you can claim and details of how to do this. The online service is likely to be available from 13th May so the date you will be given will likely be after this date.
How to Claim
We have been advised that we are not able to make a claim on behalf of our clients. We believe this is because each individual has to make a declaration to confirm that they have been affected by the virus. We understand that this may cause some confusion and stress and are sorry that we have been prevented from helping you to make a claim. We understand that you will be asked to register for a Government Gateway account. HMRC have said that they will provide instructions on how to do this. This is an online account that allows you to access your tax records. We do not have access to your Government Gateway account and therefore cannot provide you with a login. We access your tax records through an agent portal, through which we cannot claim. We do not hold any direct access to your personal tax record.
If you do not have a computer or are unable to claim online, HMRC have said they will provide another way, but have not yet given details of this or when it will be available.
Warning: Scams
Please be aware that there are a large number of scams about, sometimes appearing to be from HMRC. Some of these scams look very authentic. Usually they inform you that you are entitled to a tax rebate and ask you to either provide information or, more commonly, to click on a link. We would advise you to delete these messages which generally are sent by email or text although some people have received telephone calls from HMRC.
The only way to apply is through the link which we have given you above. Never give any of your personal information to someone posing as HMRC through an email, text or telephone call.
Payment of the Grant
If your application is successful you will receive payment approximately six working days later. You must provide your bank details during the claim process. If you are already receiving Universal Credit you will need to declare the amount that you have received and this may affect the amount of benefit that you receive. If you receive Tax Credits you must also report the amount received as self-employment income.
Contact with HMRC
HMRC have asked that you do not call them regarding the grant as this may delay the date that it is available. Instead you should use the above link in order to check your eligibility and then make a claim if you are able. They have said they will provide an online digital assistant and webinars on how to claim are also available.
We are sorry that we are prohibited from making a claim on your behalf. In some cases, we may be able to advise you or check a calculation that HMRC have made as they will be informing you of the amount of the grant they have calculated. Unfortunately, we will have to make a small charge for advising you as we have costs to cover ourselves at this difficult time. This is a brief summary of the scheme and there is more detail on eligibility and how HMRC will calculate profits on the HMRC website. In order to keep this update simple and easy to read we may have omitted some of the finer detail which may affect you.
Whilst we recognise that this is a very stressful time for many of our clients, we cannot allow anyone to be rude or aggressive to any of our team. We would ask that you remember that we are all suffering to come extent and to remain calm and respectful when asking for our support. We will always do all we can to help you.