HMRC Self-Employed Support Scheme Grants – Evidence
There are 2 grants claimable by sole traders and partners affected by the COVID-19 crisis.
The first which had to be claimed by 13 July 2020, and depending on eligibility criteria, was 80% of average profit for 2018/19, 2017/18 and 2016/17 x 3/12, capped at £7,500.
The second, claimable from 17 August 2020, depending on the same criteria, is 70% of average profits for the same years x 3/12, capped at £6,750.
They are separate grants and one can be claimed without claiming the other.
For the first grant when claiming you had to declare that you had been ‘adversely affected’ due to COVID-19 pandemic in the period pre 14 July 2020 (or before claiming if claimed prior to that date).
For the second grant, when claiming you will be required to declare that you have been ‘adversely affected’ by the pandemic post 13 July 2020.
For both grants you are also declaring that you intend to continue to trade.
There is expected to be significant HMRC compliance activity around whether an individual was trading or intended to trade, but stopped because of the pandemic and did not in fact restart.
Evidence of reasons for ceasing will be crucial where the grants have been claimed but trading does not continue/recommence.
Adversely Affected
This is not a numerical test eg. a growing business may have found it’s growth held back and hence have been ‘adversely affected’
Similarly, a business may have been anticipating lost earnings (eg. due to a cancelled contract) but find that unexpected later offers of work materialise after making a claim and earnings are ‘more normal’.
It is really important that individuals claim for only the periods in which they have been ‘adversely affected’ and keep good non-numerical evidence of why this is the case, making sure it corresponds to the correct claim period.
Examples would include:
- Cancelled contracts
- Days of forced closure
- Days of self-isolation/shielding
- Reduced footfall
- Reduced charge out rate to obtain work or imposed by customers
- Unable to get hold of materials
- Staff unable to work due to self isolation or shielding
- Extra costs which cannot be passed onto customers
Claimants need to proactively collect evidence to back up the grant claims made as again significant compliance activity is expected…
The government is not giving out all this money without checking it was correctly due to people!
Please note also, as it seems some individuals are not aware, these grants are taxable and will be included on the 2021 self-assessment tax returns. As are any ‘rates’ grant’s received.
Related news
The government has announced £20 million worth of new funding to help smaller businesses recover from the effects of the COVID-19 pandemic.
View article about £20 Million Funding To Support Smaller BusinessesEarly on in the COVID-19 crisis, it was announced that anyone who had a Payment on Account for 2019/20 due on 31 July 2020 could defer his until 31 January 2020 without interest being charged.
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