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COVID-19 Information Hub

Coronavirus Self-Employed Income Support Scheme Grant Extension

The government have announced a fourth grant under the Self-Employed Income Support Scheme for individuals affected by the Coronavirus (Covid-19) whose main source of income is through self-employment or as a partner in a partnership. This is in addition to other measures put in place to help individuals struggling to cope financially. This scheme is only open to people classed as ‘self-employed’ - it will not apply to individuals trading through a limited company (please see our commentary below). Other exclusions also apply.

Please read on for a summary of advice issued by the government and our own supplementary commentary, analysis and guidance.

Updated 22/4//2021


You will be eligible where all of the following apply:

  • You have been trading in 2019-20 and 2020-21, and are continuing to trade when you apply, or would be were it not for Covid-19.
  • You intend to continue to trade in the 2021-22 tax year.
  • You have lost trading/partnership trading profits due to Covid-19 as a result of a fall in demand, activity or capacity, or reasonably believe that you will do so in the period of the grant. Increased expenses that lead to a fall in profits does not count.
  • You have filed a self-assessment tax return for the 2019-20 tax year in which self-employment profits are included. The deadline for meeting this requirement was 2 March 2021. If your 2019-20 tax return is still unfiled, you will not qualify for the fourth grant.
  • Your trading profits were below £50,000 over the relevant tax years.
  • More than half of your total taxable income on average came from your self-employment business over the relevant tax years.
  • Amendments to earlier year submissions may impact upon your past eligibility or the level of the grant, and you may be required to repay some or all of the grant paid to you.

How to access the scheme

You will need to:

  • Apply using this link. Click on the green ‘start now’ button and following the on-screen instructions.

What is excluded?

  • Anyone whose self-employed profits exceeded £50,000 on average over 2016-17, 2017-18, 2018-19 & 2019-20 or if trading only in 2019-20, where profits exceeded £50,000 in that tax year.
  • Anyone whose self-employed profits made up less than 50% of their total taxable income from all sources during these tax years.
  • Anyone who did not file their 2019-20 tax return by 2 March 2021.
  • Anyone who filed amended returns between 26 March 2020 and 2 March 2021, so that they no longer meet the profits condition, or will receive a lower grant.
  • The newly self-employed who commenced trading after 6 April 2020.
  • Anyone whose profits have fallen solely as a result of increased costs of business.
  • Owner-directors of limited companies, trustees or owners of Furnished Holiday Lets.

More guidance can be found here.

Details of how HMRC calculate the grant can be found here.

Kirk Rice commentary:

HMRC are now tightening their processes and looking closely at those who apply to ensure that they are genuinely being adversely affected by Covid-19 over the period of the claim. Any claims that are found to be fraudulent will be repayable, together with a fine.

Newly self-employed individuals who started trading after 6 April 2020 will not benefit from the grant.

HMRC in their early guidance, has confirmed that any grant paid out under the Self-Employed Income Support Scheme will affect any claims to tax credits and any grant awarded under the scheme will also be treated as taxable income in the hands of the recipient. The grant will be subject to both income tax and National Insurance Contributions.

One of the qualifying criteria for the new grant is that you have lost trading/partnership profits as a result of a fall in demand, activity or capacity due to Covid-19. We are not sure how this aspect will be measured, but advise that it would be prudent to keep a record of lost clients, or client jobs/contracts that have been cancelled or postponed as a direct result of the virus. Where you have had to reduce your fees, then keep a record of those as well.

Trading via a Limited Company

Owner directors of limited companies are not included in the measures. This all comes down to the distinction between someone who operates their business in their own name under a self-employed trade, and someone who runs a company through which they are either paid a salary or extract profits via dividends (or both). It is only the self-employed traders who will benefit.

Private company owners who operate on their own, perhaps via a Personal Service Company, and who have no employees can now be included in the Job Retention Scheme (see here) under the furloughing provisions provided they have been paying themselves a salary via a PAYE scheme. Any such furloughed directors may only complete their statutory duties, and must not undertake any other work during the period of furlough. Where a company owner has only been paying themselves via dividends, they will not be included in the scheme.

There is also help via the Business Interruption Loan Scheme (see here), the Business Bounce Back Loan Scheme (see here) and the VAT Deferral Scheme (see here), and access to state benefits such as Universal Credit (see here).

We will be updating this page for the answers as and when they become available, so please, do check back regularly for further information.

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