On Friday (29th May) the chancellor announced that a further grant would be made available to the self-employed whose businesses have been affected by Covid-19. This was anticipated given that Rishi Sunak had previously announced that the Job Retention Scheme available to support Employers and Employees would be extend to 31 October 2020, and so it was only fair that a similar extension was provided to those that are self-employed too. There is still some disparity though, as the Self-Employed Income Support Scheme covers six months of profits, whereas as the Job Retention Scheme will have run eight months.
Additional Grant
Those that are eligible to claim will be able to claim a second (and final) grant of 70% of their average monthly trading profits, covering three months’ worth of profits. The grant will be paid in a single instalment in August, and will be capped to a maximum of £6,570.
Individuals do not have to have made a claim under the first grant to claim the second grant, as some business may have only been affected in the later months of Covid-19. Similarly, if a claim was made under the first grant, some businesses may not feel they need to claim under the second grant if their business is now returning to some form of ‘normality’.
The eligibility criteria for the second grant is the same as the first (see here for our previous article) and as before, businesses will need to confirm that their business has been adversely affected by Covid-19. There is however, no proportionately to the claim, as you do not need to supply details of how much your turnover or profits have reduced by during this period. HMRC will pay you 70% of your average trading profits, up to the cap of £6,570, so whether your business has had to completely close during this period, or it has seen a reduction to its activities but to a lesser extent, the grant payment will be the same.
There is still no information on how HMRC will check is business were adversely affected, so it is advised that individuals keep records of how their business has been impacted, in case HMRC decide to review claims in future.
Further details are expected to be announced on 12 June 2020, and we will update our guidance one these details are released.
Original Grant
If you have not yet made a claim for the original grant, this must be made by the 13 July 2020. Once the claim is accepted, the grant should be received directly into your bank account within six working days.
Unfortunately, tax agents are unable to make claims on a client’s behalf, but if you have any questions in relation to the scheme, please contact a member of the Charter Tax team who would be happy to answer any queries.
