On 29 May, HM Revenue and Customs (HMRC) extended the Self Employed Income Support Scheme (SEISS) for a further three months. HMRC are expected to issue further information on 12 June. This scheme provides financial support to self-employed people whose businesses have been negatively affected by the COVID-19 situation.
The first grant will be 80% of your average trading profits worked out over a period of three years. The amount paid out will cover three months and will be capped at £7,500 paid in a lump sum. The second grant will be 70% of the same average profits for the second three months which will be capped at £6,570 in total.
As the grants are taxable and will need to be reported on your 2020/21 tax return, you should keep a note of the amounts you receive.
The same qualifying conditions apply to both grants. To be eligible for a payment under SEISS, your profits must be under £50,000 and must be more than half of your total taxable income for that year. Alternatively, your average trading profits for the three years 2016/17, 2017/18 and 2018,19 must be under £50,000 and your average trading profits are more than your total taxable average income for those years.
For an individual who is self-employed or a member of a partnership to be eligible they must:
- Have lost trading profits due to COVID-19. You should keep records to support this.
- Have trading profits of no more than £50,000, which must be at least equal to their non-trading profits.
- Have submitted their self-assessment tax return for the year ended 5 April 2019 on or before 23 April 2020.
- Traded in the two tax years ended 5 April 2020.
- Are trading when you apply or would be if it were not for COVID-19.
- Intend to continue to trade in the current tax year ending 5 April 2021.
- Where an individual is not eligible based on the 2018 to 2019 self-assessment tax returns, HMRC intend to look at the tax years 2016/17, 2017/18, and 2018/19.
- More than half of your total income must come from your self-employment.
Your business must have been adversely affected by COVID-19. HMRC have provided guidance of when this may be the case:
- You are shielding
- You are elf-isolating;
- You are on sick leave due to COVID-19
- You have caring responsibilities because of COVID-19
- You have had to scale down or temporarily stop trading because your supply chain has been interrupted, you have fewer or no customers or clients, and your staff are unable to come to work
Certain circumstances can impact on eligibility to SEISS such as the following:
- Your tax return is late, amended or under enquiry
- You are a member of a partnership
- You are on parental leave
- You have loans covered by a loan charge
- You are claiming averaging relief
- You are not a UK resident and are claiming the remittance basis of taxation
- You are above the state aid limits
Making a Claim
Claims for the first grant must be made by 13 July 2020. Claims for the second grant will commence in August 2020. However, it is not necessary to have claimed under the first grant to be able to claim under the second grant. HMRC have issued an online tool which you can use to find out if you’re eligible to make a claim. This uses the information reported under your self-assessment tax returns. As agents we can use the online checker which will indicate from what date a claim may be made if the outcome is positive. However, we are unable to make the claim on your behalf as this may lead to a delay in your claim and may trigger a fraud alert. Click here to read our step by step guide on checking your eligibility and on how to make a claim.