COVID-19: Treasury Direction published for Self-Employment Income Support Scheme

On Friday 1 May 2020, Government published the Coronavirus Act 2020 Functions of Her Majesty’s Revenue and Customs (Self-Employment Income Support Scheme) Direction setting out the legal framework that is in place for those self-employed individuals applying for the scheme.

The Direction confirmed:

• A qualifying person must meet the following criteria:

1.  carry on a trade and their business must have been adversely affected as a result of coronavirus,
2. have delivered a tax return for a relevant tax year on or before 23 April 2020,
3. have carried on a trade in the tax years 2018-19 and 2019-20,
4. intend to continue to carry on a trade in the tax year 2020-21,
5. if that person is a non-UK resident or has made a claim under section 809B of ITA 2007 (claim for remittance basis to apply), certify that the person’s trading profits are equal to or more than the person’s relevant income for any relevant tax year or years,
6. be an individual, and
7. meet the profits condition.

• The “relevant tax year” is defined as any and all of the tax years 2016-17, 2017-18 and 2018-19.
• Clause 5 of The Direction sets out profit conditions that self-employed individuals must be able to allocate to themselves.
• Individuals will receive a maximum of £7,500.
• Individuals will need to have had an income (profit before tax) of under £50,000 per annum.
• The Direction provides the necessary calculation and the breakdown of the figures needed in order to reach the correct claim calculation.
• The Direction further goes on to cover trading profits, relevant income and how the Scheme will work for those who are affected by the loan charge.

Government have also announced that as of today (4 May 2020), HMRC will begin contacting customers who may be eligible for the Government’s Self-Employment Income Support Scheme.

View the full Treasury Direction here.

Aspire Comment

The Direction clarifies that a self-employed individual must have had their business directly affected by the pandemic in order to be eligible for the Scheme. This was not made clear in the guidance which alluded to any self-employed person being able to claim the grant providing that they met certain financial criteria.

If you require any further advice on the guidance and measures in place to aid the self-employed, please get in touch with one of our advisors on 0121 445 6178 or email enquire@aspirepartnership.co.uk.