Summary
Resolution
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:
Scheme | Period | Percentage | Cap | Claim from |
1 | May 2020 - July 2020 | 80% | £7500 | Closed |
2 | Aug 2020 - Oct 2020 | 70% | £6570 | Closed |
3 | Nov 2020 - Jan 2021 | 80% | £7500 | Closed |
4 | Feb 2021 - Apr 2021 | 80%1 | £7500 | Closed |
5 | May 2021 - Sept 2021 | 30-80%1,2 | £2850 or £75002 | July 2021 - Sept 2021 |
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.
- On the navigation bar click Nominal codes then click New/edit.
- Complete the Nominal Record window as follows:
N/CEnter 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. NameEnter the name of the account, for example, Self-employment Income Grant. - 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.*
- Click Bank accounts, click Receipts then click Bank receipt.
- 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 - 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.
This article provides general rather than specific guidance to assist all of our customers. We always do our best to make sure that the information is correct but as it's general guidance, no guarantees can be made concerning its suitability for your particular needs. The information is valid at the time of publishing and is provided without any warranty of any kind, express or implied. You should take professional advice if you require specific guidance on your individual circumstances, for example to ensure that the results obtained from using our software comply with statutory or regulatory requirements. For VAT, customs and excise and duties enquiries you should call the HM Revenue and Customs (HMRC) National Advice Service Helpline on 0300 200 3700, contact your local HMRC office or visit their website at www.hmrc.gov.uk In no event will we be liable to you for any direct, indirect, consequential or incidental loss or damage arising out of or in connection with your use of the information provided. The VAT or tax codes used in this article are based on the default or recommended codes set up in the software. These may be different in your software. |