COVID-19: Self-Employed Income Support Scheme guidance for farmers

To help combat the uncertainty faced by the self-employed as a result of coronavirus, the Chancellor announced the Self-Employed Income Support Scheme. The scheme will allow the self-employed to claim a taxable grant worth 80% of their trading profits up to a maximum of £2,500 a month.

It will be available for a 3-month period to 31 May 2020 but may be extended.

To qualify, a claimant will need to confirm to HMRC that their business has been adversely affected by coronavirus. We are aware some farmers will have lost trading profits due to coronavirus so we will be discussing the impact on your profits and whether a claim can be made.

The following criteria also needs to be met in order to qualify for the scheme:

  • You must have submitted a Self Assessment tax return for the tax year 2018 to 2019. If the return has not yet been submitted, then this must be done by 23 April 2020 otherwise no claim can be made. In addition, any amendments made after 26 March 2020 to an already submitted tax return will not be taken into account when working out the eligibility or amount of the grant
  • You must have traded in the tax year 2019 to 2020
  • You must be trading when you apply or would be except for coronavirus
  • You must intend to continue to trade in the tax year 2020 to 2021
  • Your trading profits must be no more than £50,000 and more than half of your total taxable income

The trading profits are calculated as:

  • Taxable profits for the tax year to 5th April 2019, if your self-employment commenced in that tax year
  • The average taxable profits for the years 2016-17, 2017-18, and 2018-19. If you have not submitted Self Assessment tax returns for all 3 years, then HMRC will work out the average trading profit based on continuous periods of self-employment

HMRC will take into account trading losses incurred over the period concerned when working out the averaged profits. If a person has more than one trade in a tax year then profits and losses from all trades will be added together to work out the trading profit.

If you have made a farmer’s averaging claim, then HMRC will use the profit before the averaging adjustment.

HMRC have confirmed that they will pay the grant directly into the individuals bank account, in one instalment. The grant will be subject to Income Tax and National Insurance contributions.

No claims can be made yet. HMRC aim to have made contact with all eligible taxpayers by mid-May to invite them to make a claim.

Please be aware that there has been an increase in fraudsters sending various scam texts, calls or emails claiming to be from HMRC and offering financial help or a tax refund. Do not reply or click on any links.

Our team at Baldwins can assist you with the grant claim, so please do not hesitate to contact us for help and advice.