Self-employment Income Support Scheme

*** UPDATED 11/06/2020 ***

The Chancellor also announced plans to extend the Self-Employment Income Support Scheme (SEISS) for those people whose trade continues to be, or is newly, adversely affected by COVID-19 (coronavirus).

Eligible self-employed people will be able to claim a second and final SEISS grant in August; this will be a taxable grant worth 70% of their average monthly trading profits for three months, paid out in a single instalment and capped at £6,570 in total.

The eligibility criteria for the second grant will be the same as for the first grant. People do not need to have claimed the first grant to claim the second grant: for example, their business may have been adversely affected by COVID-19 (coronavirus) more recently.

Claims for the first SEISS grant, which opened on 13‌‌ May, must be made no later than 13‌‌ July. Eligible self-employed people must make a claim before that date to receive the first SEISS grant (a taxable grant of 80% of their average monthly trading profits, paid out in a single instalment covering 3 months’ worth of profits, and capped at £7,500 in total). So far, we’ve seen over 2.3 million claims worth £6.8 billion.

It’s really important to note that as with the first SEISS grant, the eligible individual must make the claim themselves.

• Are you self-employed?  This means are you a sole trader or in a partnership?
• Did you submit a self-assessment tax return for the tax year 2018/2019?
• Were more than 50% of your earnings from self-employment?
• Did you have trading profits of less than £50,000?

If you can answer yes to each of the above then you may qualify for the self-employment income support scheme.

Check if you’re eligible to claim

HMRC have launched an online tool which you can use to find out if you’re eligible to make a claim.  You need your UTR number and NI number.

How is the self-employment grant calculated?

This scheme will allow you to claim a taxable grant worth 80% of your trading profits up to a maximum of £2,500 per month for 3 months. This may be extended if needed.

You will receive an average of the profits made from self-employment over the past three years. 

• HMRC will add together your trading profits for the tax years 2016/17, 2017/18 and 2018/19. 
• This total will be divided by 3 to get your yearly average. 
• This will then be divided by 12 to get your monthly average. 
• You will be paid 80% of your monthly average, up to a maximum of £2,500 per month for 3 months.

How will I receive the payment?

HMRC will pay the grant directly into your bank account, in one instalment. 

When will I receive the payment?

It is expected to be paid at the end of June 2020.

Who is eligible?

Only people who have submitted a self-assessment tax return for 2018/19 will be considered. 

What if I haven’t yet filed my tax return for 2018/19?

The filing deadline for this was 31st January 2020, however if you haven’t yet filed your tax return you have until 23rd April 2020 to submit it to be considered for this grant.

How do I apply?

The online service will be available from 13 May 2020. If you’re eligible, HMRC will tell you the date you can make your claim from. If your claim is approved you’ll receive your payment within 6 working days.

When you make your claim

You’ll only need your:

• Self Assessment UTR 
• National Insurance number 
• Government Gateway user ID and password – if you do not have a user ID, you can create one when you check your eligibility online
• bank account number and sort code you want the grant paid 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.

Check if you’re eligible to claim

HMRC have launched an online tool which you can use to find out if you’re eligible to make a claim.  You need your UTR number and NI number.

Do I pay tax on the grant?

Yes, you will need to include your grant payment on your self-assessment tax return for the 2020/21 tax year.  If will form part of your taxable income and will be subject to the normal taxes.  You will also need to include the grant if you claim tax credits.

What happens if I started self-employment after April 2019?

Unfortunately, in this instance you won’t be considered for the grant.  This is to avoid fraudulent claims.  Instead you should be able to claim Universal Credits. (https://www.gov.uk/universal-credit)

Does the grant include directors of limited companies?

No, this is only for people who operate as sole traders or in a partnership.

If I work as a subcontractor in the construction industry will I still get a tax rebate this summer?

Yes, if you are due a tax rebate for the 2019/20 tax year then your rebate will be processed as normal following the submission of your self-assessment tax return.

What happens if I haven’t been trading for three years?

If you have filed a self-assessment tax return for 2018/19 and your profits from self-employment are beneath £50,000 and form more than 50% of your income then you will still be considered.  The grant will be averaged over the available tax returns submitted.

What can I do if my profits were over £50,000?

You will not be considered for the self-employment income support scheme but you may be able to claim Universal Credits. (https://www.gov.uk/universal-credit)

What can I do if my profits were less than 50% of my income?

You will not be considered for the self-employment income support scheme but you may be able to claim Universal Credits. (https://www.gov.uk/universal-credit)

Where can I go for more information?

To see the government guidance visit https://www.gov.uk/guidance/claim-a-grant-through-the-coronavirus-covid-19-self-employment-income-support-scheme