Here's a summary of the Scheme from Scholes Chartered Accountants.
The Scheme enables self employed people to claim a taxable grant of 80% of their average monthly trading profits, paid out in a single instalment covering three months, and capped at £7,500 altogether. It's a temporary scheme but it may be extended.
Recipients can continue to work, start a new trade or take on other employment, voluntary work or duties as an armed forces reservist.
The grant will be subject to Income Tax and NIC.
Who can claim
You can claim if you're a self employed sole trader or partner in a partnership and:
- you carry on a trade which has been adversely affected by Covid 19;
- you traded in 2018/19 and submitted your 18/19 Self Assessment return by 23 April 2020;
- you traded in 2019/20; and
- you intend to continue trading in 2020/21.
Check if you're eligible to claim
Taxpayers can use this online tool to find out if they are eligible to claim.
To use the tool you'll need your Self Assessment UTR number and your National Insurance number.
If the tool says you are not eligible, you will be able to ask HMRC to review their decision.
How much you'll get
The taxable grant will be based on your average trading profit over the tax years 2016/17, 2017/18 and 2018/19.
The grant will be paid into your bank account in one instalment. The latest we've heard is that payments will start being made towards the end of May.
How to claim
The online claim service is not yet available. HMRC are saying they will "aim to contact you by mid-May 2020 if you're eligible", to invite you to claim.
It would appear that HMRC may only contact people who have used the online tool and entered their details; we are therefore advising claimants to use the tool now in readiness for the claims system to 'go live', making sure their contact details are all up to date.
When you make your claim
You'll need your:
- Self Assessment UTR number;
- National Insurance number;
- Government Gateway user ID and password (if you don't already have one, you can create one when you check your eligibility online); and
- your bank account number and sort code (where a BACS payment can be accepted)
HMRC will check claims and take action to withhold or recover payments that aren't actually due.
After you've claimed
Once you have submitted your claim, HMRC has said you will be told straight away if your grant is approved; and payment will be made into your bank within 6 working days.
Recipients must keep a record of the grant in line with normal record-keeping requirements; and the grant will need to be reported on the taxpayer's Self Assessment return and on tax credit claims.
For further information and updates, visit the dedicated gov.uk page here.
Contact Scholes CA by phone or e:mail for assistance.