Self-employment Income Support Scheme Calculation

Self-employment Income Support Scheme

Who is eligible:

• You need to have completed & submitted a tax return for 2018/19 (or submitted by 23 April 2020).
• Traded in 2019/20 and currently trading (or would have been if not for Covid 19).
• Profits of less than £50,000 in 2018/19 or average of 2016/17, 2017/18, 2018/19 less than £50,000.
• More than half of income is from self employment.

Calculation

• 80% of average profits over 3 years to max of £2,500 per month for 3 months

Example 1

            Profits             16/17              17/18              18/19

                                    £42,000           £46,000           £49,000

            Calculation:

            (£42,000 + £46,000 + £49,000) / 3 = £45,667

            £45,667*80% = £36,533/12 = £3,044

            As the maximum grant is £2500 per month:

            Claim would be £2,500 x 3 = £7,500

Example 2

            Profits             16/17              17/18              18/19

                                    £32,000           £26,000           £24,000

            Calculation:

            (£32,000 + £26,000 + £24,000) / 3 = £27,333            

            £27,333*80% = £21,867/12 = £1,822

            Claim would be £1,822 x 3 = £5,466

Example 3

          Profit only 1 year 18/19 -  £30,000

          Calculation:

          £30,000*80% = £24,000/12 = £2,000

          Claim would be £2,000 x 3 = £6,000

These figures are purely indicative, for general guidance only and are based on the limited information published by the Government to date, which is liable to change and makes several assumptions:

The government's guidance on 'trading profit' is minimal and there's no guidance on the interaction with averaging or losses. As such, please note that your figure:

• Averaging Adjustments are not taken into consideration.
• Trade Losses for a tax year will show as zero.
• Trade Losses from one trade that are set off sideways against general income (under s.64 and 72, ITA 2007), are disregarded even if that other income is another 'trade'.
• Trade Losses carried back against trade profits against earlier years' income from that same trade (s.89, ITA 2007) will not be considered (i.e. the earlier year's trade profit will not be reduced by the later year's s.89 loss carryback claim).

The scheme is being administered by HMRC and all eligible self employed workers will be invited to apply by HMRC directly.

Please Do not contact HMRC