It’s good news at last for the self-employed!
The chancellor announced yesterday evening that you can get a taxable grant up to a maximum of £2,500 a month, for 3 months.
CAN I APPLY?
Yes, IF you’re self-employed or a member of a partnership
- You’ve submitted your 2018/19 tax return (this was due 31 January 2020)
- You’ve traded in the tax year 2019/20 (that’s 6th April 2019 to 5th April 2020)
- Are currently trading & affected by COVID-19
- You intend to continue trading in the tax year 2020/21 (that’s 6th April 2020 onwards)
OTHER KEY INFO
The scheme will be open to those with a trading profit of less than £50,000 in 2018/19, or an average trading profit of less than £50,000 from 2016/17, 2017/18 and 2018/19.
Those who are recently self-employed (since 6th April 2019) and do not have a full year of accounts will not receive any help under this scheme.
Sounds good – HOW MUCH CAN I GET?
You’ll get a taxable grant which will be 80% of the average profits from the tax years (where applicable):
2016 to 2017
2017 to 2018
2018 to 2019
Just to spell it out: the average is the total trading profit for the 3 tax years (where applicable) , divided by 3 (where applicable).
This average then gets divided by 12 to calculate a monthly average
You will get the lower of:
That monthly average
or £2,500 per month
HOW LONG WILL THIS HELP LAST?
Currently, just 3 months. But that may increase.
HOW WILL IT BE PAID?
Directly into your bank account. In one instalment.
HOW DO I APPLY?
⛔There’s nothing you can do yet. DO NOT CONTACT HMRC YET!⛔
⚠️They’re desperately trying to put together the systems in place to help you – calling them will only delay them….!⚠️
So once HMRC contact you ASAP, and once you’ve applied, HMRC will verify that you’re eligible and if so they’ll confirm how much you will get.
WHEN WILL I GET PAID?
📆The chancellor said “from the beginning of June”📆
🟢The maximum you’ll get is £2,500 x 3 = £7,500
🟢If your average monthly earnings are smaller than £2,500 , you’ll get that smaller amount x 3.
This will be classed as taxable income.
HERE’S AN ILLUSTRATION
Let’s say you had profits of £20,000 , £18,000 & £17,000 for the last 3 tax years.
That means you had an average profit of £18,333 per year.
£18,333 / 12 = £1,527pm
HMRC will pay you 3 x £1,527 = £4,581
WHAT WERE MY PROFITS?
♦️If you’re our client, this will be written on your tax calculations that we sent you.
♦️You can also log into your HMRC portal/login & see for yourself.
♥️♥️ But because we’re awesome, we’ll be writing to you with your profits, and what we think you will be getting from HMRC … so please hold tight!
🏢👩💼WHAT ABOUT IF I PAY MYSELF A SALARY & DIVIDENDS FROM MY OWN LIMITED COMPANY?🏢👨💼
Those who pay themselves a salary and dividends through their own company are not covered by the scheme but they will have 80% of their salary covered by the Coronavirus Job Retention Scheme if operating through PAYE.
📣Dead Simple Accounting will be emailing all those applicable limited company directors today (27th March) about this.📣
📣Dead Simple Accounting will be writing to all our self-employed clients with your profits, and what we think you will be getting from HMRC … so please hold tight!📣