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Wed 25th March – Total UK Cases 9,529 – Total UK Deaths 422

Hope for the self employed with a trading history of less than one year

2 min read

If you commenced self employment after 5 April 2019, the Chancellor said that you cannot claim a self employment support grant.

However, Robert Jenrick MP representing the Government tonight on BBC Question Time, clearly and repeatedly contradicted this and said people with less than one year self employment “should give us what they have got” and we will see if the scheme can apply to them.

So it is probably worth asking your accountant to prepare some accounts from the date you started self employment to 29th February 2020 and ask them to negotiate a grant with HMRC on your behalf. Alternatively it might be a good idea to get your accounts to 5th April 2020 completed very quickly so that you can file your 2020 tax return with HMRC.

There could be a balancing decision as to whether to draw your accounts up to 29th February 2020 or to 5th April 2020. If Covid19 hit your business early then the inclusion of March 2020 could drag your average monthly profits down and therefore reduce your grant. A good accountant will undoubtedly guide you on this point.

If this is correct, as an example if you started self employment on 1st May 2019, and your accountant prepares accounts for the 10 months to 29th February 2020, which show taxable profits of £30,000. Your annualised profits for a full year would be £36,000. If Mr Jenrick is to be believed this could mean that you can claim a self employment support grant of £2,400 per month.

I would suspect that HMRC could ask for supporting evidence so good records will be essential. Bank statements, sales invoices, purchase invoices and if appropriate VAT returns and payroll records – typically the usual information that you would give to your accountant anyway.

i also suspect that to use this concession if indeed it is true, you will have needed to have already registered with HMRC as self employed and already have a unique tax reference (UTR).

This briefing is for guidance purposes only. Mackenzies Accountants Ltd and the author accept no responsibility or liability whatsoever for any action taken or not taken in relation to this note and recommend that appropriate professional advice be taken having regard to your own particular circumstances.

Mackenzies Chartered Accountants
1 Langley Court, Pyle Street, Newport, Isle of Wight, PO30 1LA

Telephone 01983 528139
mark@mkchartered.co.uk