COVID-19 – Update 17 April – Self Employed Income Support Scheme (SEISS)

In addition to our original post on SEISS, which can be found here, the government has released further information on this scheme.

Here is what we know:

The online service you will use to make the claim is not live yet. HMRC are aiming to contact those eligible by mid-May, with payments being made early June. HMRC will use data on the 2018/19 tax returns already submitted to identify those eligible.

The scheme will enable those who are eligible to claim a grant worth 80% of three months’ trading profits — up to a maximum of £2,500 a month. We now know this grant does not need to be paid back but will be subject to Income Tax and NI contributions.

Whilst you are waiting for the grant you can claim for Universal Credit. However, you will need to record the grant as part of your self-employment income, which may affect the amount you receive.

The government has also stated that you can continue to work or take other employment, including voluntary work if you receive the grant. 

Who can claim?

You can claim if you’re a self-employed individual or a member of a partnership and you:

• have submitted your Self Assessment tax return for the tax year 2018 to 2019
• traded in the tax year 2019 to 2020
• are trading when you apply, or would be except for coronavirus
• intend to continue to trade in the tax year 2020 to 2021
• have lost trading profits due to coronavirus

The individual must have filed their 2018/19 tax return. If it has not been submitted yet, you have until 23 April 2020 to do so, or you will not be able to claim. Any figures included in amended 2018/19 tax returns submitted after 26 March 2020 will not be taken into account when working out your eligibility or amount of the grant.

Trading profits must be no more than £50,000 and more than half of your total income for either 2018/19 or the average of the 3 tax years 2016/17, 2017/18 and 2018/19. If you have not submitted self-assessment tax returns for all 3 years you can find out how eligibility will be worked out here.

Find out how HMRC works out your trading profits and total income for this scheme here

Individuals who have received payment for work or services in the form of a loan or other form of credit covered by the loan charge might be able to claim the grant. The only difference is your eligibility and average trading profits will be worked out on either:

• the average of the tax years 2016/17 and 2017/18
• the tax year 2017 /18 if you were not self-employed in the tax year 2016/17

 I claim farmers’ averaging relief, how does this affect my claim?

For individuals who claim this relief, HMRC will use the amount of profit before the impact of the averaging claims to work out if you can claim the grant and how much grant you will receive.

How do I claim?

You cannot make a claim yet, but should you be eligible, HMRC aim to contact you by mid-May to invite you to claim using the Gov.UK online service. For those who are unable to claim online, there will be an alternative made available.

You can find out more about SEISS here.