This scheme will allow businesses to claim a taxable grant worth 80% of trading profits up to a maximum of £2,500 per month for the next 3 months. It is open to those who have submitted their self-assessment return for 2018/19, traded in 2019/20, are trading when they apply (or would be except for COVID-19), intend to continue to trade in 2020/21 and have lost trading/partnership trading profits due to COVID-19.
Self-employed trading profits must be less than £50,000 and more than half of the individual’s income must come from self-employment. This is determined by at least one of the following conditions being true:
- having trading profits/partnership trading profits in 2018/19 of less than £50,000 and these profits constitute more than half of the total taxable income; or
• having average trading profits in 2016/17, 2017/18 and 2018/19 of less than £50,000 and these profits constitute more than half of the average taxable income in the same period.
If a business started trading between 2016 to 2019, HMRC will only use those years for which a return has been filed. Any outstanding 2018/19 returns must be filed by 23 April 2020.
A taxable grant of 80% of the average profits from the years (where applicable) 2016/17, 2017/18 and 2018/19 will be paid. HMRC will add together the total trading profit for the 3 tax years (where applicable) then divide by 3 (where applicable) and use this to calculate a monthly amount up to a maximum of £2,500 per month for 3 months. The grant will be paid directly into a bank account in one instalment.
HMRC will contact relevant businesses if they are eligible for the scheme and invite them to apply online