If you are self-employed or a member of a trading partnership and have been adversely affected by Coronavirus (Covid-19), you may be able to claim a grant under the Self-Employment Income Support Scheme (SEISS). In this article, we explain who can claim, how to claim and how much you can receive under the scheme.
If you are eligible (see below), the scheme allows you to claim a taxable grant of 80% of your average monthly trading profits. This will be paid out in a single installment covering three months and will be capped at £7,500.
If you receive the grant, you can continue to work, start a new trade or take on other employment (including voluntary work).
The grant will be subject to Income Tax and self-employed National Insurance.
Who can claim?
You can claim if you are self-employed either as an individual or a member of a partnership, and you:
- traded in the year 2018 to 2019 and submitted your self-assessment tax return on or before 23 April 2020 for that year, and
- traded in the tax year 2019 to 2020, and
- intend to continue to trade in the tax year 2020 to 2021, and
- carry on a trade which has been “adversely affected by Coronavirus”.
Your business could be adversely affected by Coronavirus if, for example:
You’re unable to work because you:
- are ‘shielding’. Shielding is where you are avoiding face-to-face contact to protect yourself because you’re clinically extremely vulnerable
- 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
Are you eligible to claim?
To work out your eligibility HMRC will first look at your trading profits for the tax year 2018 to 2019. This will be the profit for the year before any brought forward losses were applied or personal allowance deducted.
Your trading profits must be no more than £50,000 and at least equal to your non-trading income. Your non-trading income is other income from other sources such as income from earnings, rental income, dividends, interest, and pension income.
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. Trading profits and losses from the three years will be averaged out, as will other income.
The same criteria will then be applied in that the average trading profits must be no more than £50,000, and at least equal to, or more than your average “other” income.
Check online if you’re eligible and when you will be able to claim
You can use the online tool to find out if you’re eligible to make a claim.
You’ll need your Self Assessment Unique Taxpayer Reference (UTR) number and your National Insurance number. You can find both of these on the front page of your tax returns.
If you are eligible, HMRC will tell you the date you’ll be able to make a claim from and ask you to add your contact details. HMRC will use these to remind you when the online service will be available to you. The date on which you can make a claim is being allocated on a random basis between 13 and 18 May – it is not first come, first served.
If you’re not eligible, you can ask HMRC to review this after you’ve used the online tool. We can help you with this – see below.
How much will you get?
Once your trading profits or average trading profits have been established, the grant is worked out as 80% of 3/12 of that profit. If this figure is more than £7,500, the grant will be capped at £7,500.
The grant amount will be paid directly into your bank account, in one installment.
How to claim
Claims must be made online, and the service will be available from 13 May 2020 (although you will only be able to claim from the date given to you by HMRC when you completed the online eligibility tool).
When you make your claim you will need:
- 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 HMRC to pay the grant into
You’ll also have to confirm to HMRC that your business has been adversely affected by Coronavirus.
You will be told straight away if your claim is approved, and if it is you’ll receive your payment within six working days.
You will need to keep a copy of the grant application including the claim reference and evidence that your business has been adversely affected by coronavirus.
The grant will be reported on your self-assessment tax return for 2020 to 2021.
Watch this short video produced by HMRC demonstrating what you need to do to register.
Finally, a warning
If you receive a text, call or email which claims to be from HMRC, offering financial help or a tax refund and asking you to click on a link or to give personal information, it is a scam. You should forward the email to email@example.com and then delete it. You can read more about phishing and HMRC-related scams here.
If you would like to discuss applying for a grant under the Self-Employment Income Support Scheme (SEISS), please call us on 020 7625 4545.
For all latest Coronavirus (Covid-19) updates, please visit our dedicated support page here.
Warning: The above is merely general guidance and should not be relied upon as formal advice. The advice we give to each client will depend on their specific circumstances. We suggest you take professional advice before taking any action in relation to the issues discussed above.