Self-Employment Income Support Scheme (SEISS)
Some more good news, this time for our self-employed friends. The Government has now opened the Self-Employment Income Support Scheme (SEISS) . Yes, yet another acronym!
This scheme was originally announced as going live in June but has been brought forward. It is a grant, not a loan, so will not have to be repaid. It is classed as an Income though and will be subject to Income Tax and Self Employed National Insurance.
You must make the claim yourself. Your tax agent or adviser (Total Accounting) must not claim on your behalf as this will trigger a fraud alert, and you will then have to contact HMRC. This will cause a significant delay to you receiving your payment.
The scheme will allow you to claim a taxable grant of 80% of your average monthly trading profits; paid out in a single instalment covering 3 months and capped at £7,500 altogether. It is a temporary scheme, but it may be extended.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.
Making a claim under the Self-Employment Income Support Scheme (SEISS)
You can claim if your business has been adversely affected by Covid – 19. There are criteria that you need to meet, if you’re a self-employed individual or a member of a partnership and the following apply:
- You traded in the tax year 2018 to 2019 and submitted your Self-Assessment tax return on or before 23 April 2020 for that year
- You traded in the tax year 2019 to 2020
- You intend to continue to trade in the tax year 2020 to 2021
- You carry on a trade which has been adversely affected by coronavirus
- Your trading profits is no more than £50,000 and at least equal to your non-trading income
- The majority of your earnings in 2018 – 19 came from being self employed
NOTE – For relatively new self-employed people i.e. those that set up in 2018. The last criteria is the one that’s causing problems! To work out your eligibility HMRC will first look at your 2018 to 2019 Self-Assessment tax return. So, if you were employed on PAYE during that year before going self-employed and the PAYE earnings are higher than your self-employed earnings you will NOT qualify. This means you could have been self-employed for nearly 2 years but won’t get any grant. If you’re not eligible based on the 2018 to 2019 Self-Assessment tax return, HMRC will then look at the tax years 2016 to 2017, 2017 to 2018, and 2018 to 2019.
How to claim
You can check online at the HMRC website: https://www.tax.service.gov.uk/self-employment-support/enter-unique-taxpayer-reference
You will need your:
- Self-Assessment Unique Taxpayer Reference (UTR) number
If you’ve lost your UTR then this will explain what to do - https://www.gov.uk/find-lost-utr-number
- National Insurance number
If you’re eligible you will be given a date that you’ll be able to make your claim from, and be requested to provide your contact details. You may also be able to make a claim straight away. So, make sure you have the following information to hand.
- Government Gateway user ID and password - if you do not have a user ID, you can create one when you check your eligibility or make your claim
- UK bank details (only provide bank account details where a Bacs payment can be accepted) including:
- bank account number
- sort code
- name on the account
- your address linked to your bank account
You will have to confirm to HMRC that your business has been adversely affected by Covid - 19 so be ready with the reason. You are:
- are sheilding
- are self-isolating
- are on sick leave because of coronavirus
- have caring responsibilities because of coronavirus
- you’ve had to scale down or temporarily stop trading because:
- your supply chain has been interrupted
- you have fewer or no customers or clients
- your staff are unable to come in to work
You should not claim the grant if you’re a limited company or operating a trade through a trust.
If you’re not eligible
HMRC have used the information you or your tax agent or adviser submitted on your Self-Assessment tax returns to work out your eligibility. If you submitted your return late (between 26 March 2020 and 23 April 2020) check your eligibility again as the online service has been updated. Remember we cannot apply or make enquiries on your behalf!
If you still think you should be able to claim you can ask HMRC to review your eligibility.
Finally don’t forget to keep a record for your next Tax Return. HMRC will have it recorded so no hiding this one!
Here’s the link to the main HMRC webpage – KEEP CHECKING HERE as information is being constantly updated: https://www.gov.uk/guidance/claim-a-grant-through-the-coronavirus-covid-19-self-employment-income-support-scheme#eligible
To find out more email: email@example.com