How the scheme works

The UK Government's Coronavirus Self-employment Income Support Scheme is available to support the self-employed during the coronavirus outbreak. There have been five schemes announced so far, four of which are now closed:

The first four grant amounts were based on your average trading profit, based on Income Tax Self Assessment tax returns submitted for the last three tax years where applicable. For businesses that started trading between 2016 and 2019, HMRC only used those years for which you filed a tax return. The fifth grant is different and is based on business turnover.

¹ For the fourth and fifth schemes, for the first time, some of the relatively newly self-employed, who completed tax returns for the 2019 - 2020 financial year, will qualify. They previously lost out if they had not been trading in 2018 - 2019.

² For the fifth scheme, people whose turnover has fallen by 30% or more will receive the full 80% grant, capped at £7500. People whose turnover has fallen by less than 30%, will receive a 30% grant, capped at £2850.

Grants will be paid directly into your bank account in one instalment. You can claim the grant and continue to do business.

Who can apply

As a self-employed individual or member of a partnership, you can apply if you meet the criteria set out by the government. For full details of the criteria visit GOV.UK >

How to apply

Claims for the fifth grant are open until the end of September 2021. Find out more on GOV.UK >

Process a grant received

Create a self-employment income grant nominal code

In Sage 50 Accounts we recommend you create a new nominal code within the Other income area of your profit and loss, for Self-employment Income Grant received. We recommend you use nominal code 4950, or the next available code, unless otherwise advised by your accountant. This will help you when reconciling any grant income received.

1. On the navigation bar click Nominal codes then click New/edit.
2. Complete the Nominal Record window as follows:
   

   N/C	Enter the nominal code number you want to create, for example, 4950. If the nominal code isn't featured, you must add it to your chart of accounts.
   Name	Enter the name of the account, for example, Self-employment Income Grant.

3. Click Save then click Close.

Post the grant received into your bank account

For the purpose of this article we'll use the following example:

• You receive a grant of £2,500 on 15 April 2021.
• The grant is received into the company current account, nominal code 1200.
• In this example, we're using the non-vatable tax code, T9.*

1. Click Bank accounts, click Receipts then click Bank receipt.
2. Complete the Bank receipts window as follows:
   

   Bank	Date	N/C	Details	Net	T/C	Tax
   1200	15/04/2021	4950	Self-employment income grant received	2500.00	T9	0.00

3. Click Save then click Close.

NOTE: * For VAT registered businesses, income is vatable if it's within the normal scope of a business or linked to a supply.  Coronavirus related grants are one-off events unrelated to any supply of goods or services. Whilst it's unlikely that any grant income will attract a VAT liability, you should seek specific advice from your accountant to understand if any grant received should be treated as vatable or non-vatable income.  You can find further details on what income is vatable in the HMRC manual. Grant income is likely to be considered income for income or corporation tax purposes.

Additional questions you may have

To help support you, we've put together a handy Self-employment Income Support Scheme FAQs guide.