The facility for applying for the second grant for self employed persons opens on 17th August 2020 and will be on a staged basis again. It will close on 19 October 2020.
Calculation of grant
This second grant is calculated as 70% of three months of trading profits, up to a maximum of £6,570. So you will get less than the first claim. Just like last time HMRC will make the calculation for you, you do not need to provide figures.
Grants are expected to be paid within 6 working days of the application being submitted.
Once again your agent cannot apply for this grant on your behalf and if they do so it will delay your claim being paid.
Self-employed individuals and members of a partnership are eligible where the taxpayer:
- submitted their self assessment tax return for the tax year 2018/19 by 23 April 2020;
- traded in the tax year 2019/20;
- intends to continue to trade in the tax year 2020/21;
- carries on a trade which has been adversely affected by coronavirus.
HMRC has provided some guidance on the meaning of ‘adversely affected’. This includes being unable to work because the taxpayer is shielding, self-isolating or is on sick leave or has care responsibilities because of coronavirus. It also includes scaling down, temporarily stopping trading or incurring additional costs because:
- the supply chain has been interrupted;
- the business has fewer or no customers;
- staff are unable to work
- one or more of contracts have been cancelled; or
- protective equipment was purchased to comply with social distancing rules.
To qualify for the second grant the business must be adversely affected after 13 July 2020.
You should also keep any evidence that your business has been adversely affected by coronavirus at the time you made your claim, such as:
- business accounts showing a reduction in turnover
- confirmation of any coronavirus-related business loans you have received
- dates your business had to close due to lockdown restrictions
- dates you or your staff were unable to work due to coronavirus symptoms, shielding or caring responsibilities
These grants are taxable and classed as income when claiming credits.
You will need to report both grants:
- on your Self Assessment tax return for tax year 2020 to 2021
- as self-employed income for any Universal Credit claims
- as self-employed income as changes to your tax credits claims
If you have overclaimed the first grant or overclaim this grant then you must notify HMRC. There are deadlines for doing so and penalties for not doing so.