Anyone who is self-employed or a member of a partnership that:
- has submitted an Income Tax Self-Assessment tax return for the tax year 2018-19
- traded in the tax year 2019-20
- are trading when they apply, or would be except for COVID-19
- intend to continue to trade in the tax year 2020-21
- have lost trading/partnership trading profits due to COVID-19
Any self-employed trading profits must be less than £50,000, with more than half of an individual’s income having come from self-employment. HMRC will determine this by at least one of the following being true:
- having trading profits/partnership trading profits in 2018-19 of less than £50,000 and these profits constitute more than half of your total taxable income
- having average trading profits in 2016-17, 2017-18, and 2018-19 of less than £50,000 and these profits constitute more than half of your average taxable income in the same period
If you started trading between 2016-19, HMRC will only use those years for which you filed a Self-Assessment tax return.
HMRC have extended the deadline for submitting any Income Tax Self-Assessment tax return for the tax year 2018-19, to 23 April 2020 to enable anyone who missed the January 2020 deadline to still be applicable.
HMRC will use any 2018-19 returns already submitted to identify those eligible and will risk assess any late returns filed before the 23 April 2020 deadline in the usual way.
Some self-employed individuals will clearly fall outside the parameters of the scheme, in particular:
- if you started in business after 6 April 2019, and so have no history of tax-returns for your business
- if your self-employment income is less than 50% of your total income
- if your trading profits are over £50,000 per year.
The scheme also does not provide support for individuals who provide their services through personal service companies (PSCs). They instead have to use the furlough leave scheme as an employee of their PSC, and that scheme rules out the option of continuing to work at the same time as being on furlough leave.