Summary of Self-employed Income Support Scheme
Dan Martin at Enterprise Nation has put together a summary of the Self-employed Income Support Scheme, for full details please for the link.
SEISS allows you to claim a taxable grant worth 80% of your trading profits up to a maximum of £2,500 a month. The grant will be paid out in a single instalment covering three months and capped at £7,500 in total.
The scheme is temporary but may be extended.
The grant will be subject to income tax and National Insurance contributions but does not need to be repaid.
If you receive the grant you can continue to work, start a new trade or take on other employment including voluntary work, or duties as an armed forces reservist.
You can make a claim for Universal Credit while you wait for the grant, but any grant you receive will be treated as part of your self-employment income and may affect the amount of Universal Credit you get. Any Universal Credit claims for earlier periods will not be affected.
Directors or employees who are paid through PAYE may be able to get support using the Coronavirus Job Retention Scheme.
Who can claim
You can claim a grant through SEISS if you:
• are a self-employed individual or a member of a partnership
• have submitted your Self Assessment tax return for the tax year 2018-2019
• traded in the tax year 2019-2020
• are trading when you apply, or would be except for coronavirus
• intend to continue to trade in the tax year 2020-2021
• carry on a trade which has been adversely affected by coronavirus
Examples of how your business could be adversely affected by coronavirus include:
• you’re unable to work because you:
o are shielding
o are self-isolating
o are on sick leave because of coronavirus
o have caring responsibilities because of coronavirus
• you’ve had to scale down or temporarily stop trading because:
o your supply chain has been interrupted
o you have fewer or no customers or clients
o your staff are unable to come in to work
Your trading profits must be no more than £50,000 and more than half of your total income for either:
• the tax year 2018-2019
• the average of the tax years 2016-2017, 2017-2018, and 2018-2019
How much you’ll get
You’ll get a taxable grant based on your average trading profit over the three tax years 2016-2017, 2017-2018 and 2018-2019.
HMRC will first look at your 2018 to 2019 Self Assessment tax return.
If you’re not eligible based on the 2018 to 2019 Self Assessment tax return HMRC will look at the tax years 2016-2017, 2017-2018, and 2018- 2019.
To work out the average trading profit, HM Revenue & Customs (HMRC) will add together your total trading profits or losses for the three tax years then divide by three.
If you have not submitted Self Assessment tax returns for all three years, HMRC will work out your average trading profit based on continuous periods of self-employment, which will be either:
• the tax years 2017-2018 and 2018-2019
• the tax year 2018-2019 only, even if you were self-employed in the tax year 2016-2017
The grant will be 80% of your average trading profit, divided by 12 which will give a monthly amount. HMRC will pay this or up to a maximum of £2,500 a month, whichever is lower.
There is a more detailed guide on how HMRC works out total income and trading profits for the Self-employment Income Support Scheme.
The grant will be paid directly into your bank account, in one instalment.
How different circumstances affect the scheme
Check here if your circumstances affect your eligibility for the following:
• if your return is late, amended or under enquiry
• if you’re a member of a partnership
• if you’re on or took parental leave
• if you have loans covered by the loan charge
• if you claim averaging relief
• if you’re non-resident or chose the remittance basis
• if you’re above the state aid limits
How to claim
You cannot make a claim yet. HMRC is contacting eligible individuals directly via email, text or letter. The scheme opens to claims on 13 May.
You can also use the online tool to confirm eligibility and receive a confirmed date from 13-18 May from which you will be able to apply for your grant.
If you’re unable to claim online an alternative way to claim will be available.
When you make your claim, you’ll need your:
• Self Assessment Unique Taxpayer Reference (UTR) number. If you do not have it, find out how to get your lost UTR number
• National Insurance number. If you do not have it, find out how to get your lost National Insurance number
• Government Gateway user ID and password
• bank account number and sort code you want HMRC to pay the grant into (only provide bank account details where a Bacs payment can be accepted)
You’ll have to confirm to HMRC that your business has been adversely affected by coronavirus.
If you claim the grant HMRC will treat this as confirmation you’re below the state aid limits.
HMRC will check claims and take appropriate action to withhold or recover payments found to be dishonest or inaccurate.
After you’ve claimed
You will be told immediately if your grant is approved. The money will be paid into your bank account within six working days. The first payments will be made on 21 May.
You must keep a copy of all records in line with normal self-employment record keeping requirements, including:
• the amount claimed
• the claim reference number for your records
• evidence that your business has been adversely affected by coronavirus
You will need to report the grant:
• on your Self Assessment tax return
• as self-employed income for any Universal Credit claims
• as self-employed income and that you’re working 16 hours a week for any tax credits claims