With the furlough scheme firmly in place for employees during the Covid19 outbreak, the Self-Employment Income Support Scheme (SEISS) has been a welcome relief for those whose own business has been affected by the pandemic.
Self-employed people and members of partnerships who are eligible for the second (and final) grant will be able to submit their claim from 17th August. We’ve taken a look at the key points you need to know, from finding out whether you’ll qualify for support, to how to make a claim.
Am I eligible for the SEISS grant?
If your business has been adversely affected by the coronavirus outbreak on or after 14th July, you could apply for the payment.
Examples of being adversely affected includes…
- You’re unable to work as you’ve been shielding, self-isolating, have care responsibilities due to the outbreak, or have taken sick leave because of Covid19.
- You have had to scale down/stop trading because you have had a drop in customers, your employees cannot work or you have had contracts cancelled.
- Your business has incurred additional costs due to the purchasing of protective equipment so you could trade safely under the social distancing rules.
The following points must also apply (as outlined on the gov.uk website)
- 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
To work out your eligibility HMRC will first look at your 2018 to 2019 Self Assessment tax return. Your trading profits must be no more than £50,000 and at least equal to your non-trading income.
It’s important to note that those who trade through a limited company or a trust cannot make a claim, and individuals currently claiming Maternity Allowance will not have their eligibility affected.
If you’re eligible for the grant, HMRC will contact you. You can make a claim for the second grant, even if you did not claim for the initial financial support under the scheme.
How much can I claim under the self-employment income support scheme?
Eligible businesses will get a taxable grant based on average trading profit over the 3 tax years:
- 2016 to 2017
- 2017 to 2018
- 2018 to 2019
HMRC will calculate the average trading profit by adding together your total trading profits (or losses) for these three years, which is then divided by three.
You’ll receive a single payment that covers 70% of your average monthly trading profits for 3 months. The maximum you can receive is £6,570.
HMRC will make this payment directly into your bank account, and their online service will explain how they’ve worked out how much you’re eligible for.
I know my business is eligible for government support; how do I submit my claim?
You’ll need to make your claim using the online gateway, which will become available from 17th August 2020 on the gov.uk website. You’ll have until 19th October 2020 to make your claim.
Have the following details to hand when you make your claim:
- Government Gateway user ID & password (if you don’t have one you can create one at this point).
- Your bank details – a UK account that accepts BACS transfers.
It’s important that you submit the claim yourself. Advisers or agents cannot apply on your behalf, as this will trigger a fraud alert, which will cause a significant delay to your payment.
I’ve been told I’m not eligible for the grant – what can I do?
HMRC uses the information submitted on your Self Assessment tax returns to calculate eligibility, so you’ll need to contact HMRC directly if you believe any information is incorrect.
There may be other support available to help your business, such as Universal Credit, deferral of income tax or VAT payments and various loan schemes. You’ll find more information on the gov.uk page regarding the SEISS, which also contains links to other useful articles.
The Bickerstaff team are on hand to offer advice and guidance around the financial support available to businesses during these difficult times. Just get in touch to have a chat and we’ll see what we can do – we’re a friendly bunch with lots of experience under our belts!