23 April 2020
The Chancellor of the Exchequer has issued a financial package targeted at those who derive the majority of their income from self-employment who are facing hardship due to the Covid 19 pandemic, called the Self Employed Income Support Scheme. The self-employed includes partners in a partnership.
The amount of grant available under the SEISS has a ceiling of up to £2,500 per month for 3 months, and the expectation is for this to be rolled out by June 2020. The scheme will be reviewed and may well be extended.
Any grant paid will be subject to income tax as well as National Insurance, and will need to be reported on a future tax return.
SEE WHETHER YOU MAY QUALIFY FOR A GRANT WITH OUR CALCULATOR.
The Chancellor appears to have delayed roll out for a little while to try and prevent any illegitimate claims. To qualify, the individual must have been self-employed for the 2018/19 tax year, still trading in the current tax year, and anticipate trading in the 2020/21 tax year. If you were not self-employed in 2018/19, you will not qualify under the rules as they stand and as announced.
Furthermore, one of two tests must be passed:
Taxable trading profits for the individual in 2018/19 of less than £50,000 and these profits constitute more than half of the total taxable income or;
Average taxable trading profits for the individual in 2016/17, 2017/18, and 2018/19 of less than £50,000 and these profits constitute more than half the average taxable income in the same period.
Where the individual has not been trading for the previous 3 years, HMRC will only use those years for which tax returns have been filed.