Self-employed: financial help if you’ve lost business income
If you are self-employed or a member of a partnership and have lost income due to Coronavirus you can apply for Self-employment Income Support – a grant which you don’t need to pay back –provided your business meets certain conditions. Whether or not you’re eligible, there is also other financial support available.
Need to know
To qualify for Self-employment Income Support you must:
- have submitted a Self-Assessment tax return for the tax year 2018/19 and traded in the tax year 2019/20 and intend to trade in 2020/21
- be trading when you apply, or would be except for Coronavirus
- have lost trading/partnership profits due to Coronavirus
- have earned more than half of your average taxable income from self-employment in the period or periods above.
- have had average annual trading or partnership profits of less than £50,000 across the two or three tax years up to and including 2018/19
- if you haven’t been trading that long, average profits of less than £50,000 in tax year 2018/19.
How much will you get?
- You’ll get a taxable lump sum grant of 80% of the average profits up to a maximum of £2,500 per month. You will not have to repay this grant.
- This will cover a three month period from March to June.
- You must make your claim for the first grant on or before 13 July 2020.
- A second lump sum will cover 70% of your profits up to £2,190 a month, will cover the three month period from June to August.
- To claim the second grant, you must confirm your business has been adversely affected on or after 14 July 2020.
- You’ll get the payment at the beginning of June, backdated to cover March, April and May. The government has said the scheme might be extended.
- You can apply for the second income support grant from August.
How do I get it?
- HM Revenue & Customs (HMRC) aims to contact all people who are self-employed or in partnerships and meet the above criteria by mid-May explaining how to make an online application if your income has been affected.
- Important: you will access this scheme only through GOV.UK. If someone texts, calls or emails claiming to be from HMRC, saying you can claim financial help or are owed a tax refund do not offer any details or click on any links. It will be a scam.
Useful to know
- Self-employment Income Support is a taxable grant, so you will have to declare it on your next Self-Assessment tax return and might have to pay income tax and National Insurance on it.
- You may be able to claim Universal Credit while waiting for Self-employment Income Support to be paid, however this will depend on household income and savings. For example, if you and your partner/spouse have savings over £16,000 you won’t be eligible. Your partner/spouse’s income will also be taken into account. Bear in mind as well that the grant will need to be declared as income. This could significantly reduce or remove the next Universal Credit payment you are entitled to.
- If you’re self-employed, but took time off during 2018/19 to care for new children, or a newly adopted child, can still claim through the scheme. You will be assessed on either your 2017/18 tax return or your 2016/17 and 2017/18 tax return.
Action to take
- If cashflow is an immediate problem, check out Universal Credit and other benefits that you may qualify for while waiting for Self-employment Income Support.
There is other help available if you’re having trouble with housing costs, bills, loans and credit cards.
More support if you’re self-employed
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