SELF-EMPLOYMENT INCOME SUPPORT SCHEME EXTENDED UNTIL AUGUST
The Coronavirus Self-Employment Income Support Scheme (SEISS) was announced back in March, and gave the self-employed a grant of up to £7,500 if their business had been affected by COVID-19.
On 29 May 2020 Chancellor Rishi Sunak announced that the SEISS will be extended, with a second and final grant covering a further 3 months from June to August 2020.
The second grant will work in exactly the same way as the first with no change to the qualifying criteria (re-capped below). As with the first grant, you will need to confirm that your business has been adversely affected by Coronavirus but it is not yet clear whether you will be asked to confirm that the business has been adversely affected by Coronavirus in general, or specifically for the 3 months covered by the second grant to qualify for it. I would expect the latter.
As with the first grant, you can continue to work, start a new trade, or take on other employment and still receive the grant. You just need to be adversely affected by Coronavirus to qualify.
Examples given for being adversely affected by Coronavirus include: those shielding, self-isolating or on sick leave; those with caring responsibilities because of Coronavirus; and those that have to scale-down or temporarily stop trading, for example due to staff being unable to work, a drop in customers, or issues getting supplies.
So, how much will you get? The previous grant was based on 80% of your average monthly self-employed profits over the 3 tax years 2016/17 to 2018/19, and then multiplied by 3 months, but capped at £7,500 in total. The second grant is based on 70% of your average monthly self-employed profits from 2016/17 to 2018/19, multiplied by 3 months, and subject to a cap of £6,570.
Or, put more simply, you will get 7/8ths of the amount you received from the first grant.
Here’s a quick re-cap on who is eligible to claim. You can claim a grant if ALL of the following statements are true:
- You were self-employed* in the 2018/19 tax year;
- You submitted your 2018/19 tax return before 23 April 2020;
- You have traded in the tax year 2019/20;
- You intend to continue to trade in the tax year 2020/21; a
- You carry on a trade which has been adversely affected by Coronavirus
*self-employed individuals include sole traders, partners in a partnership and members of an LLP
PLUS your annual self-employed profits must be under £50,000, and more than half of your taxable income must come from self-employment. To qualify under this condition, one of the following statements must be true:
- Your self-employed profits in 2018/19 were less than £50,000 AND these profits constituted more than half of your total taxable income for that year; or
- Your average self-employed profits in 2016/17, 2017/18 and 2018/19 were less than £50,000 AND that averaged profit constituted more than half of your average total taxable income for those 3 tax years.
There is an online HMRC tool to check if you are eligible for the SEISS which you can find here. You will need your 10 digit Unique Taxpayer Reference Number (which can be found at the top of any HMRC letters or statements) and your National Insurance Number to use this tool. HMRC will base the result on the information they hold. Please note that this tool only tells you if you are eligible – it doesn’t calculate how much you can claim.
So, how do you claim the second grant? As with the first grant, taxpayers must submit their own claims, through their Government Gateway account and we are unable to submit claims on behalf of our clients. But of course we will be on hand to assist.
When can you make the claim? Applications for the second grant will open in August and we are expecting a similar approach to the first grant, with taxpayers being given a phased date/time from which applications can be made.
As before, the grant will be paid directly into your bank account in one instalment within six working days of the claim submission.
Important note: Those who haven’t yet applied for the first SEISS grant of up to £7,500 for March, April and May must do so by 13 July 2020.