The 26th of March 2020 saw an important announcement from the Chancellor, as he unveiled the Self-Employed Income Support Scheme (SEISS). Capital has been reviewing the proposals and will summarise the key aspects of SEISS here.
SEISS is open to you if you can demonstrate trading profits through your self-assessment tax return. HMRC has extended the window for late filing of tax returns by four weeks (to April 23rd). The scheme will be open for three months and provide taxable grants, backdated to March. It will cover 80% of average monthly trading profits to a maximum of £2,500 per month.
Payments will take the form of a single, taxable lump sum, and will start in June. It is not possible to apply for SEISS yet and HMRC will contact eligible claimants.
Where available, payments are based on an average trading profit over the last three tax years.
Who is eligible to claim under SEISS?
SEISS will be available to anyone who is self-employed. This includes individuals trading as a partnership and who have lost trading profits due to COVID-19. You should note, though, that eligibility depends on certain conditions being met.
- You must have been trading in the 2019/20 tax year. You must also be trading at the time of making the application for SEISS (unless COVID-19 prevents you from trading). AND you must have filed a tax return for 2018/19.
- Self-employed work must have provided more than half your income. This is based on either your trading profits for 2018/19 or the average of the last three tax years (2016/17, 2017/18 and 2018/19). If you began trading somewhere between these dates, eligibility is assessed based on your filed tax returns.
- Your trading profits must be below £50,000.
What about the small print?
The Chancellor made it clear. You cannot access SEISS unless you file, or have filed, your tax returns. As we mentioned above, the window for late filing has been extended to April 23rd.
If you operate a PAYE scheme or pay yourself a salary and dividends through your own company, you will be eligible to claim via the Coronavirus Job Retention Scheme. Alternatively, you can use the Coronavirus Business Interruption Loan Scheme.
Read our blog about support available for business owners.
How do I apply?
Once the scheme is up and running, if you meet the criteria, HMRC will contact you. You need take no action at this stage (other than filing your tax return if you have yet to do so).
The grant will be paid to your bank account at the beginning of June.
What if I need help now?
If you don’t qualify, or if you can’t wait until June to get financial support, there are other options available. For example, you may be eligible for Universal Credit.
Here at Capital, we know that many people are struggling to adapt to these quickly changing circumstances. People are anxious and concerned about the effect the virus is having on all aspects of their lives.
The most important thing is to remain calm. Take advantage of the measures where you can and where you need to, make sensible decisions to keep teams together (you will need them when you are through this). Where possible, pay your bills as usual. If you can’t, then discuss the matter with your suppliers. At the end of this, good businesses will recover and those that make it through will be stronger, more resilient and primed for success.
Good luck to each of you, and if you would like to discuss any aspect of this briefing or any other matter related to your business or personal finances, please contact us. We are here to help.