Online tool started so UK self-employed can check eligibility for financial support but applications can’t be made yet

                                      

By John Brace (Editor) on 5th May 2020

Many moons ago, around the start of the lockdown due to the cornavirus pandemic in March 2020, financial support was promised by the UK government for some self-employed people (there are around 5 million in the UK and some of those won’t be eligible). I will declare an interest at this point as one of the self-employed people that are eligible. The below is not meant as accountancy or tax advice but is an update to a story published on the 26th March 2020 (Chancellor announces financial support for some of the self-employed impacted by Covid-19).

Since then an online eligibility checker tool has been set up. To use it you need your 10 digit Self Assessment Unique Taxpayer Reference number and your National Insurance Number. It may also require you to login using your Government Gateway ID. At the end though, this tool should inform you if you can apply and the date you can apply.

The way the amount is calculated is unfortunately (as usual with tax matters) somewhat complicated, but if you’re interested the HMRC guidance which goes on for around 12 pages can be viewed here.

That’s the good news bit – the bad news is that the amounts paid out through this (called the Self-Employment Income Support Scheme) when that stage is reached are subject to income tax and national insurance – therefore for many some of it may be asked for back through the tax system at a later date.

So yes, the self-employed will be financially supported, but for many HMRC will then ask for some of the money paid to be returned in the form of income tax and national insurance in the future.

The other main point to make is that it’s based on a percentage of profits, not turnover and the self-employed still need income coming in to pay their overheads during this period.

There is also an overall cap of £7,500.

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