In this bulletin we answer some of the more common queries that we’ve been dealing with.

Me and my partner are both self-employed; are we both eligible?
Yes, so long as you both meet the small print below.

When do I see the money?
June.  We think it’ll be a lump sum to cover 3 months, so a quarter of the average of 80% of 3 years profits.

June!  How do I survive until then?
The Government suggests you consider applying for Universal credit, or a coronavirus loan.

How much do I get again?
Here are some numbers to give you an idea of the amounts involved – say your profits are £10K for 2016-17, £15K for 2017-18 and £20K for 2018-19.  This averages out at £15K; 80% OF £15K is £12K.  £12K is your average annual profit and the June grant will cover April, May and June so 3/12 of £12K.  The grant that should arrive in June is £3K.
If you want us to let you know what to expect then send Andy here a message (andy@williscooper.com)

How long does this scheme go on for?
The government will decide in June/July whether to extend the scheme.

Sounds OK so far; what’s in the small print?
There’s the £2.5K monthly cap we mentioned above, so if your average profits are greater than this then then you’ll receive the max, being a 3/12 x 80% of £30K = £6K.
Also, you can’t join in if:
– Your profits are over £50,000 (even £1 over), or
– You started self-employment after 5th April 2019, or
– Less than half your income is from self-employment.
That’s about it at the moment; but there’s probably much more small print to follow.
The £50K threshold does seem a bit tough, especially when you consider that the equivalent employee furlough scheme has no such limits. Downing Street has said that the government ‘will not be able to protect every single job or save every single business’.  This scheme is quick and dirty and arbitrary.

I’m still doing bits and pieces of work where I can.  Will this affect my entitlement to the claim on this scheme?
No it doesn’t, you can continue to work.  The chancellor has made it clear that you can claim this grant and ‘continue to do business’.  He also said that the scheme was only open to those ‘who have been adversely affected by the coronavirus’ and we’re not quite sure how these two statements will be reconciled.

How do I apply?
HMRC will contact you, although we don’t know how yet, and invite you to fill in an online form.

Is this grant tax free?
No, this grant income will be entered on your 2020-21 tax return.

Is there anything else for the self-employed?
If you have tax to pay in July, this has been deferred until Jan-21.  If you are VAT registered, then don’t forget to cancel your VAT DD.  Then there’s Universal credit.  The Universal Credit eligibility rules, especially the removal of the minimum income floor, have been changed and so it’s worth checking to see if you qualify; click here.  But be aware that household savings of over £16K render you ineligible to claim Universal Credit.  Also remember that as this grant is taxable income this means that it could effect your universal credit claim for June.

Anything else?
The fraudsters are already up and running, so be aware.  HMRC says that this scheme will only be accessed through GOV.UK and so anything else is a scam.

Anything else to be worried about?
The chancellor observed the difference between how the employed and self-employed are taxed in his speech, and then added, ‘if we all want to benefit equally from state support, we must all pay in equally in future’…