Planning to take up one of the grants available from HMRC for self-employed individuals? If you think you are eligible, you now have more opportunity to take advantage.
The first stage, if eligible allows you to apply for an initial grant of 80% of your average monthly trading profits, capped at £2500 per month.
This grant opened on 13th May 2020 and applications for it close on 13th July 2020.
The Chancellor recently announced that this scheme will be extended to a second grant, worth up to £6,570, 70% of monthly average trading profits.
Unfortunately for some, the rules on whether you qualify have not changed.
If you can get the first grant, you will be able to gain the second.
This grant will be paid in one lump sum for 3 months’ worth of funds.
For further details on the initial grant, visit our PREVIOUS BLOG.
Am I eligible?
As a reminder, to qualify you need to:
- Have submitted your Income Tax Self-Assessment tax return for the tax year 2018-19.
- Continued to trade in 2019-20 and intend to keep trading in 2020-21.
- Have been ‘adversely affected’ by COVID-19.
- Have an average self-employed trading profits of no more than £50,000. Your trading income should be at least half of your total income.
Is the grant taxable?
Yes it is. While we wait for the final ‘law’ to be written, we expect that the grants will be taxed in the 20/21 tax year.
Is the grant subject to VAT?
No it is not, it is outside the scope of VAT.
How do I get the second grant?
HMRC have said that applications will open from August 2020. More details on this process are expected 12th June, but we presume as before, it will be an online application made HERE on HMRC’s website.
Just as with the first grant, unfortunately us accountants or tax agents cannot do this for you. You will have to apply personally.
If you need help understanding the different reliefs available to you, please get in touch – we’d love to help.
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