There are some updates from HMRC today, 4 May 2020, around the Coronavirus Self Employment Income Support Scheme.

There has been no change to the scope of the scheme, or to those included, see our earlier updates:

Todays announcements let us know:

  • From 4 May 2020 (note from) HMRC will start contacting businesses (sole traders and partners) who may be eligible to claim, to check eligibility
  • If eligibility is confirmed then they will be given a date when they can submit a claim
  • The claims service will open on 13 May 2020 – which is ahead of the original timetable
  • Payments to be made by 25 May 2020 or within 6 days of making a claim

There is a new eligibility checker tool announced today – which you can use now to check your eligibility with HMRC and raise query if HMRC say you are not eligible but you disagree.

There is an paradox in the statements above – HMRC are contacting taxpayers to check eligibility, yet they have released an eligibility checker that tells you whether you are eligible – the missing link may be that the contact from HMRC will enquire whether your business has been impacted by Coronavirus which is the part of the eligibility process HMRC won’t know about yet, whereas the eligibility tool reflects the mechanics of average profits and tax years.

A reminder of the basics of the scheme:

  1. It applies to Sole Traders and Partnerships only, not companies
  2. Must have been Self Employed in 2019-20 and intending to continue Self Employment
  3. Earn at least half income from Self Employment
  4. Self Employment profits less than £50,000
  5. For 3 and 4 the test is made first against 2018-19 taxes and then widened to 2016-17 and 2017-18 if necessary
  6. If eligible, then grant equal to three months historic business profits calculated by averaging over 2016-17, 2017-18, 2018-19, up to a maximum grant of £7,500

The business must have been adversely effected by Coronavirus, in HMRCs words for example if:

  • you’re unable to work because you:
    • are shielding
    • are self-isolating
    • are on sick leave because of coronavirus
    • have caring responsibilities because of coronavirus
  • you’ve had to scale down or temporarily stop trading because:
    • your supply chain has been interrupted
    • you have fewer or no customers or clients
    • your staff are unable to come in to work

Its not a requirement that you have ceased to trade completely, so you can still have some income coming in.

What we don’t know as yet:

  • Is there any apportioning of the grant, eg if you’ve lost less than £7,500 of business profits
  • Are there any evidencing requirements for the above?

Best understanding is that the grant will not be apportioned or evidenced. based on HMRCs guidelines which say “The claims process will be very simple”