Following the announcement of the 2021 budget, the UK government has extended the Self-Employment Income Support Scheme by introducing a fourth and a fifth grant.
The eligibility to the new grants will be based on the 2019/20 tax return, provided that it has been submitted by the 2nd March 2021 and show self-employment trading profits to be no more than £50,000 and at least equal to non-trading income. As a result, even those who have started to work as self-employed from 6 April 2019 can apply. HMRC has confirmed that if self-employed workers are not eligible according to the 2019/20 tax return, will then look at the following years (Tax Returns): 2016-17, 2017-18, 2018-19 as well as 2019-20. Taxpayers to be eligible must also have traded in both tax years: 2019-20 e 2020-21.
The fourth grant will cover the period from February to April 2021. With a cap of £ 7,500, it will be set at 80% of three months’ average trading profits.
The fifth grant will cover the period from May to September 2021 and it will be worth either:
- 80% of three months’ average trading profits, with a cap of £ 7,500, for those who will incur a reduction in turnover of at least 30%;
- 30% of three months’ average trading profits, with a cap of £ 2,850, for those who will incur a reduction of turnover of less than 30%.
HM Revenue and Customs is already getting in touch with those who started trading as self-employed in 2019/20 and who could potentially apply for both grants by asking them to confirm their identity and to provide supporting evidence regarding their current trading status. Applicants can expect to receive a letter from HMRC between 8 March and mid-April 2021, advising them that they will be contacted by telephone within ten working days. Therefore, taxpayers who receive the letter should make sure that HMRC holds their correct telephone number.
During the call, it will be requested to applicants to confirm their e-mail address and to agree in receiving a link to a cloud shared folder. Afterwards, applicants will have two days to upload one form of identity and the last three months’ bank statements in order to demonstrate their trading activity.
In the event that HMRC fails to reach the taxpayer, it will send another letter.
Taxpayers who receive the letter but do not complete the necessary preliminary checks will not be able to apply for the grants.
See a copy of the HMRC letter you should receive
For further information please do not hesitate to contact us at info@well-tax.com. You can also follow us on our social media or you can visit our website www.well-tax.com.
Author
Sergio Schittone