Government Self-Employed Income Support Scheme

As part of the Government’s COVID-19 relief package, the Chancellor announced a Self-Employed Income Support Scheme yesterday evening. This will provide a taxable cash grant of up to £2,500 per month for at least 3 months for self-employed individuals that meet certain criteria.

Importantly, those eligible for the scheme mush have either already submitted a 2018/19 tax return or you must do so by 23 April 2020.

Who qualifies for the scheme?

To qualify, you will need to be a self-employed individual or a member of a partnership, the following criteria needs to be met:

  • An Income Tax Self Assessment tax return for the tax year 2018-19 needs to have been submitted (if not, this can be submitted by 23 April 2020)
  • You must have traded in the tax year 2019-20
  • You must be trading when you apply, or would be trading, except for COVID-19
  • You intend to continue to trade in the tax year 2020-21
  • You have lost trading/partnership trading profits due to COVID-19

Your self-employed trading profits must also be less than £50,000 and more than half of your income comes from self-employment. This is determined by at least one of the following conditions applying:

  • Having trading profits/partnership trading profits in 2018-19 of less than £50,000 and these profits constitute more than half of your total taxable income
  • Having average trading profits in 2016-17, 2017-18, and 2018-19 of less than £50,000 and these profits constitute more than half of your average taxable income in the same period

Please note: You do not have to been trading for three years to receive this grant, but you do have to have submitted a 2018/19 Self Assessment tax return, or, if this is outstanding, submit one by 23 April 2020. Read our hassle-free guide to submitting a tax return for assistance.

If you started trading between 2016-19, HMRC will only use those years for which you filed a self-assessment tax return.

When will payment be made, and how much will you receive?

Payments will not be made until 1 June 2020, and the grant is taxable

Those eligible will be able to receive a cash grant worth 80% of their average monthly trading profit over the last three years. (up to a maximum of £2,500 per month)

Claims will be made online, with the cash being paid directly into people’s bank accounts. Guidance will be issued by HMRC on how to apply in due course.

The scheme is being designed by HMRC and will cover the three months to May. Grants will be paid in a single lump-sum instalment covering all 3 months and will start to be paid at the beginning of June.

How to apply for the Self-Employed Income Support Scheme

To minimise fraud, only those who are already in self-employment and meet the above conditions will be eligible to apply. 

HMRC will use existing information to check potential eligibility and invite applications once the scheme is operational, you are not able to apply to HMRC for the scheme. For clients that believe they are eligible for the scheme and have not been invited, we are able to check eligibility. 

Those who pay themselves a salary and dividends through their own company are not covered by the scheme but will be covered for their salary by the Coronavirus Job Retention Scheme if they are operating PAYE schemes.

We are awaiting further information from HMRC and will provide a further update in due course. 

For further information on this scheme and for advice on other measures available to support businesses impacted by COVID-19, please contact us on or fill out the form below.

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