Help for the self employed affected by the coronavirus outbreak

Friday 27 March: Last night the chancellor announced further assistance in the form of a taxable grant called

The Coronavirus Self-Employment Income Support Scheme

HMRC will use existing information to identify those eligible and will invite applications for the scheme.  In this application you will be required to demonstrate that you meet the eligibility requirements.  The grant will be paid directly into your bank account in one instalment.

The scheme will be available to a self-employed individual or a member of a partnership where:

  • The Income Tax Self Assessment tax return for the tax year 2018-19 has been submitted (or will be submitted by 23 April 2020)
  • You have traded in the tax year 2019-20
  • are trading when you apply, or would be except for COVID-19
  • intend to continue to trade in the tax year 2020-21
  • 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 must be from self-employment. This is determined by at least one of the following conditions being true:

  • 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.Where trading started between 2016-19, HMRC will average the profits over the period of the business.

Amount of the grant

 The taxable grant will be based on 80% of the average profits from the three previous tax years (or average of total profits if trade commenced later than April 2016), up to a maximum of £2,500 per month for 3 up to months.  This period may be extended by the Government if needed.  The grant is taxable and therefore should be declared in any claim for tax credits.

Unfortunately, this scheme will not help those who have become self employed from 6th April 2019, nor will it be available for those with an average profit of more than £50,000 per annum.

This assistance did come with a suggestion that there could be major changes to the way that the self employed are taxed in the future to potentially equalise tax in line with employees.


For more information, please contact Karen Keeling, Dafferns Tax Director