Further guidance was issued today (Tuesday 14 April) concerning the Self Employment Income Support Scheme. We have highlighted the key points of the below:
What is the Self Employment Income Support Scheme (“SEISS”)?
If you are self-employed this scheme will allow you to claim a taxable grant worth 80% of your trading profits up to a maximum of £2,500 a month. It will be available for 3 months but may be extended.
If you have other employment as a director or employee which is paid through PAYE, your employer may be able to get support using the Job Retention Scheme.
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 or take on other employment including voluntary work.
You can make a claim for Universal Credit while you wait for the grant, but any grant received 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.
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
To be eligible then your trading profits must also be no more than £50,000 and be more than half of your total income for either:
• the tax year 2018 to 2019
• the average of the tax years 2016 to 2017, 2017 to 2018, and 2018 to 2019
You will also need to confirm to HMRC that your business has been adversely affected by coronavirus.
How will it be calculated?
HMRC will use the figures on your tax returns for your total trading income (turnover), then deduct any allowable business expenses and capital expenditure, including Capital Allowances.
When calculating your trading profits, they will not deduct:
• any losses carried forward from previous years
• your personal allowance
There has not yet been any clarification in relation to the position regarding losses carried back to previous years.
If you have more than one self-employed trade in the same tax year then HMRC will add together all profits and losses for all these trades to work out your trading profit.
If you traded for more than one year – to work out your average trading profit we will add together all profits and losses for all tax years you’ve had continuous trade.
However, if you have not submitted Self-Assessment tax returns for all 3 years HMRC will work out your average trading profit based on continuous periods of self-employment, which will be either:
• the tax years 2017 to 2018 and 2018 to 2019
• the tax year 2018 to 2019 only, even if you were self-employed in the tax year 2016 to 2017
Your total income is the total of all your:
• income from earnings
• trading profits
• property income
• savings income
• pension income
• miscellaneous income (including taxable social security income)
You’ll get a taxable grant based on your average trading profit over the relevant number of years.
The grant will be 80% of your average trading profit up to a maximum of £2,500 per month (whoever is lower), divided by 12 which will give a monthly amount.
Amendments to self-assessment tax returns – If you amend a submitted return after 26 March 2020 any changes will not be considered when working out your eligibility or amount of the grant.
Loans covered by the loan charge – if you’re self-employed and have received payment that is covered by the loan charge, you may be able to claim the grant. However your eligibility and average trading profits will be based on either:
• the average of the tax years 2016 to 2017 and 2017 to 2018
• the tax year 2017 to 2018 if you were not self-employed in the tax year 2016 to 2017
You will not have to file your 2018 to 2019 Self-Assessment tax return by 23 April 2020. You should file by the 30 September 2020.
If you’re a self-employed farmer claiming farmers’ averaging relief – HMRC will use the amount of profit before the impact of the averaging claims to work out if you can claim the grant
How do I make a claim?
HMRC have confirmed they will aim to contact those affected by mid-May 2020 inviting them to make a claim, and are aiming to make payments by early June 2020. They will use the date on tax returns already submitted to identify those who are eligible.
The online service you’ll use to claim is not available yet.
Please note that you will only be able to claim using the GOV.UK online service. If you receive texts, calls or emails claiming to be from HMRC, offering financial help or a tax refund and asking you to click on a link or to give personal information, it is a scam.
We would also refer you to our original guidance on the Self Employment Income Support Scheme.
The government’s full update can be read here: