Guidance for the Self Employed – (SEISS)
We fully understand the difficulties that you may be facing in these uncertain times and we want to assure you that our team are here to help. To find out how we can support you, please speak to one of our team today.
The information included on this page is our interpretation of what has been published at this time, this may change in the future as further information and clarity of the information already published becomes clearer. We will be updating this page regularly.
Latest update – 10th November 2021
Return to your claim for the Self-Employment Income Support Scheme
A Section has been added with links to guidance for the fifth grant and previous grants. A link to guidance on how to pay back a grant has also been added. You can use the online service to check the status of your payment, update your details, see how much you were paid or if you think the grant amount is too low.
If you have made a claim, HMRC will check your details and pay your grant into your bank account in the next 6 working days. They will send an email when your payment is on its way. Contact HMRC if you haven’t heard from them after 10 working days since you made your claim and you’ve not received your payment in that time.
If you’ve received a letter from HMRC stating you need to pay back some or all of the grant then see a new section which been added to the guidance called ‘Check how to tell HMRC and pay money back’. You can use the service to check whether you need to tell HMRC and pay back a grant.
See: Return to your claim for the Self-Employment Income Support Scheme – GOV.UK (www.gov.uk)
Updated – 21st September 2021
Self Employed Income Support Scheme (SEISS) update
If you are eligible for the latest SEISS grant you have until 30 September to apply.
Reporting SEISS grants on tax returns:
SEISS grants are taxable and subject to National Insurance contributions, you should report any SEISS grants received on or before 5 April 2021 on the 2020-21 Self-Assessment tax return (filing deadline of 31 January 2022).
For most people, this means you need to report the first, second and third grants on the 2020-21 Self-Assessment if they were paid on or before 5 April 2021. The fourth and fifth grants should not be included in 2020-21 returns, as these were paid after 5 April 2021, and should instead go on the 2021-22 return (filing deadline of 31 January 2023).
Calculating turnover as a member of a partnership:
HMRC have been asked about customers who joined a partnership between April 2020 and April 2021. If you are in this situation, you need to work out the percentage share of the partnership’s turnover. It will be the same percentage of profit you took from the partnership in the 12-month period from April 2020 to April 2021. If you have other businesses, you should add the percentage share of the partnership to the turnover from these.
What not to include when calculating turnover for the fifth grant:
Anything reported as ‘any other income’ on tax returns should not be included when calculating turnover for the fifth SEISS grant. This includes things such as Universal Credit, maternity allowances, retirement income and foreign income.
You should also not include any previous coronavirus (COVID-19) support payments in the turnover, even though the payments may be taxable when calculating profit. COVID-19 support payments include:
- previous SEISS grants
- Eat Out to Help Out payments
- local authority or devolved administration grants
See: Work out your turnover so you can claim the fifth SEISS grant – GOV.UK (www.gov.uk)
Updated – 31st August 2021
The self-employed have until the end of the month to apply for the final grant available via the self-employed income support scheme (SEISS).
Everyone who is eligible for the last SEISS grant should have received a personal start date from HMRC in recent months. These gave self-employed taxpayers a date from which they can apply for the support, with the first applications being accepted from 29 July 2021.
HMRC has warned it won’t process claims submitted before an individual’s personal start date. This staggered start aims to give HMRC enough time to assess each claim before the window closes on 30 September 2021.
Chancellor Rishi Sunak said earlier this year that the fifth round of grants will “support those most affected by the pandemic”. There are two levels of grant available. Those whose turnover fell by 30% or more will continue to receive the full 80% grant of up to £7,500.
Those whose turnover has fallen by less than 30% will receive a reduced 30% grant of up to £2,850. HMRC is using a turnover test to determine which level of grant taxpayers qualify for (either 30% or 80% of three months’ average monthly profits).
Just like the previous four SEISS grants, the latest grant is also subject to income tax and self-employed National Insurance contributions for 2021/22.
Speak to us for clarity on your business’s turnover.
Updated – 24th August 2021
Self-Employment Income Support Scheme (SEISS) update
HMRC has released guidance entitled “Check if you need to change your Self-Assessment return for SEISS”:
You need to check your Self-Assessment return if you have:
- already submitted your 2020 to 2021 Self-Assessment tax return online
- claimed a SEISS grant before 6 April 2021
HMRC may have made an adjustment to your return if:
- the amount of the SEISS payments put in the SEISS box does not match HMRC records
- there was no SEISS amount entered
- you did not submit a Self-Employment or partnership page (SA103 or SA104) and received SEISS payments
Payments from the first, second and third SEISS grants (received on or before 5 April 2021) should have been included on your 2020 to 2021 return in the box for Self-Employment Income Support Scheme grants. These can be found:
- on page 2 of the ‘other tax adjustments’ section, within the Self Employment (full) page (SA103F) – this is Box 70.1 on the paper return
- in the ‘other tax adjustments’ section of the Self Employment (short) page (SA103S) – this is Box 27.1 on the paper return
- on page 2 of the ‘trading or professional profits’ section of the partnership page (SA104) – this is Box 9.1 on the paper return
- at section 3.10A of the SA200 tax return
HMRC are correcting returns where SEISS grants have been reported incorrectly. If HMRC have corrected your return, you must check whether you used the correct boxes or not.
Please contact us if you need help in completing your Self-assessment return.
Updated – 3rd August 2021
The fifth round of the Self-Employment Income Support Scheme (SEISS) is now open
HM Revenue & Customs (HMRC) has announced that the portal for the fifth round of the Self-Employment Income Support Scheme (SEISS) is now open.
In recent weeks, the tax authority has been directly contacting taxpayers that it believes are eligible for the fifth round of the scheme, providing them with their personal claim date.
These individuals can now make a claim from this date using the link below:
Make a claim via the SEISS claims portal
Taxpayers can claim from their personal claim date up until the claims service closes on 30 September 2021.
Earlier this month HMRC published detailed guidance for the fifth round of the Self-Employment Income Support Scheme (SEISS), which confirmed the following:
Eligibility
To be eligible for the grant, an individual’s trading profits in 2019 to 2020 must have been no more than £50,000 and must have been at least equal to income from other sources.
Self-employed individuals must also confirm that they:
- Intend to continue to trade in 2021 to 2022; and
- Reasonably believe there has been a significant reduction in their trading profits due to reduced business activity, capacity, demand or inability to trade due to Coronavirus from May 2021 to September 2021.
They will also need to keep records of evidence that supports their declaration.
Turnover
Unlike previous rounds of the scheme, the fifth round of the SEISS will offer two levels of grant, depending on the impact Coronavirus has had on a self-employed individual’s turnover in a 12-month period beginning between 1 and 6 April 2020.
Those whose turnover fell by 30 per cent or more will once again be able to claim a grant worth 80 per cent of three months’ average trading profits, capped at £7,500 in total.
Meanwhile, those whose turnover fell by less than 30 per cent will be able to claim a grant worth 30 per cent of three months’ average trading profits, capped at £2,850 in total.
Self-employed individuals who have already completed their 2020 to 2021 Self-Assessment Tax Returns can find their turnover figures there, although they should not include anything reported as ‘other income’.
They should also be aware that this figure will only apply to a 12-month figure beginning on 6 April 2020 and turnover for a period beginning earlier in April 2020 could be different.
Previous SEISS grants, Eat Out to Help Out payments and local authority or devolved administration grants should not be counted towards turnover figures for the purposes of the scheme.
However, with 2020 to 2021 Self-Assessment Tax Returns not due until 31 January 2022, many self-employed individuals will not yet have completed a return. In these circumstances, HMRC advises that individuals should:
- Check their accounting software
- Go through bookkeeping or spreadsheet records that cover self-employment invoices and payments received
- Check the bank account they use for their business to account for money coming in from customers
This turnover figure should then be compared with the figure reported on a 2019 to 2020 Self-Assessment Tax Return to calculate the percentage fall in turnover during the year to April 2021 and reported to HMRC. Self-employed individuals can access their previous returns by accessing their personal tax account online.
Where 2019 to 2020 was not a normal trading year for a self-employed individual, they may use the turnover reported in their 2018 to 2019 Self-Assessment Tax Return. However, they must show how 2019 to 2020 was not a normal year.
HMRC gives the following examples of circumstances that might have meant 2019 to 2020 was not a normal year:
- Being on carers leave, long-term sick leave or having a new child
- Carried out reservist duties
- Lost a large contract
- Did not submit a 2019 to 2020 return for reasons that mean you are still eligible for a grant, such as having a new child.
Self-employed individuals who began trading in 2019 to 2020 and did not trade in any of 2018 to 2019, 2017 to 2018 or 2016 to 2017, may claim 80 per cent of three months average trading profits, capped at £7,500 in total, as long as they meet the other eligibility criteria.
In a slight change to the earlier guidance, for the purposes of the turnover test partners making a claim should use turnover for the partnership as a whole, except if they have another business (either a sole trade or partnership), in which case they use their share of partnership turnover when making the comparison.
The clarifies that the profit share rules apply only when the partner has multiple trades in either 2019/20 or the pandemic period.
Taxable treatment of the grant
SEISS grants are subject to Income Tax and National Insurance Contributions and must be included on a 2021 to 2022 Self-Assessment Tax Return. Grants are also counted toward annual allowances for pension contributions.
For help and advice, please contact us.
Updated – 20th July 2021
Self-Employment Income Support Scheme (SEISS) – get ready to claim the fifth grant
HMRC have provided a new video about the SEISS fifth grant. You can view it here: https://www.youtube.com/watch?v=pfHgwBqnwfg
See: Help and support if your business is affected by coronavirus (COVID-19) – GOV.UK (www.gov.uk)
Work out your turnover so you can claim the fifth SEISS grant
The introduction to the guidance has been edited to explain that you would need to tell HMRC about your turnover if you traded in 2019 to 2020 as well as any of the other tax years listed. The section ‘How to work out your April 2020 to April 2021 turnover’ has been updated with examples of start dates you can use.
See: Work out your turnover so you can claim the fifth SEISS grant – GOV.UK (www.gov.uk)
Latest update – 13th July 2021
HMRC publish details of the Fifth SEISS grant claim
Full details of the fifth Self-Employed Income Support Scheme (SEISS) grant, including a new turnover test which determines the level of the grant, were published by HMRC on 6th July.
Unlike the CJRS Furlough Grants to support employees’ wages, Tax Agents are not allowed to make SEISS grant claims on their client’s behalf. This seems unreasonable as most self-employed traders will find the HMRC guidance inexplicable and will need their accountant/ tax agent’s assistance in determining how much they are entitled to!
Although the eligibility for the fifth grant is the same as the fourth grant, the amount of the fifth grant will be determined by how much the turnover of the business(es) have reduced compared to the turnover in the reference year.
The fifth grant is 80% of three months’ average trading profits capped at £7,500 for those whose turnover has reduced by 30% or more. Those with a turnover reduction of less than 30% will receive a grant based on 30% of three months’ average trading profits, capped at £2,850.
We have been waiting for the precise rules for determining turnover, but HMRC guidance provides more questions than answers and further clarification is still required.
See: Work out your turnover so you can claim the fifth SEISS grant – GOV.UK (www.gov.uk)
The turnover figure required is for a 12-month period starting on any date between 1 and 6 April 2020. Those who prepare accounts on a tax year basis will be able to use the same figure that will appear on the 2020/21 tax return.
That turnover figure is then compared to the turnover in the “reference period” which for most individuals will be the turnover figure from their 2019/20 tax return and there is an option to use 2018/19 if 2019/20 was not a normal year for the business.
The turnover figure will be the sum of all of the taxpayer’s businesses but should exclude coronavirus support payments (for example previous SEISS grants, eat out to help out payments and local authority grants).
The rules for partners seem particularly illogical, especially where they are also involved in another business. We will keep you updated if and when further clarification is published.
Please contact us if you need help with making the claim.
Updated – 6th July 2021
Self-Employed Income Support Scheme (SEISS)
The grants to self-employed individuals whose businesses have been impacted by coronavirus has been extended to cover periods February 2021 to April 2021 (fourth grant – now closed) and May 2021 to September 2021 (fifth grant).
Eligibility: Check if you can claim a grant through the Self-Employment Income Support Scheme.
The online claims service for the fifth grant will be available from late July 2021. Find out more about the fifth grant.
Check if you need to change your Self-Assessment return for SEISS
You need to check your Self-Assessment return if you have:
- already submitted your 2020 to 2021 Self-Assessment tax return online
- claimed a Self-Employment Income Support Scheme (SEISS) grant during 2020 or 2021
HMRC may have made an adjustment to your return if:
- the amount of the SEISS payments put in the SEISS box does not match their records
- there was no SEISS amount entered
- you did not submit a Self-Employment or partnership page (SA103 or SA104) and received SEISS payments
The adjustment (and how to check it) depends on your circumstances and how you submitted your return. If we submit your return we will ensure the SEISS grants have been declared in the correct boxes. If you need help in submitting your return please contact us.
See: Check if you need to change your Self Assessment return for SEISS – GOV.UK (www.gov.uk)
Updated – 25th May 2021
Tell HMRC and pay back a Self-Employment Income Support Scheme grant
Find out what to do if you need to pay back some or all of a SEISS grant.
You must tell HMRC if, when you made the claim, you were not eligible for the grant.
For example:
- for the first or second grant, your business was not adversely affected
- for the third or fourth grant, your business had not been impacted by reduced activity, capacity or demand or inability to trade in the relevant periods
- you did not intend to continue to trade
- you have incorporated your business
You must also tell HMRC if you:
- received more than they said you were entitled to
- amended any of your tax returns on or after 3 March 2021 in a way which means you are no longer eligible or are entitled to a lower fourth grant than you received.
See: Tell HMRC and pay back a Self-Employment Income Support Scheme grant – GOV.UK (www.gov.uk)
Penalties for not telling HMRC about coronavirus (COVID-19) support scheme overpayments – CC/FS11a
If you have received a grant but were not eligible or you have been overpaid, find out about penalties you may have to pay if you do not tell HRMC.
Updated – 19th April 2021
HM Revenue & Customs contacts self-employed individuals who could be eligible for the fourth round of the Self-Employment Income Support Scheme
HM Revenue & Customs (HMRC) is now contacting self-employed individuals who could be eligible for the fourth round of the Government’s Self-Employment Income Support Scheme (SEISS).
The fourth round of the scheme covers the period from 1 February 2021 to 30 April 2021 and is worth 80 per cent of three months’ average trading profits, paid in a single instalment capped at £7,500.
HMRC is contacting self-employed individuals whose 2019-20 Self-Assessment tax returns show trading profits of no more than £50,000 and which are equal to or greater than income from other sources.
Where someone is not eligible based on their 2019-20 Self-Assessment tax return, HMRC will then assess their eligibility based on their average trading profits for 2016-17, 2017-18, 2018-19 and 2019-20.
However, not all self-employed individuals who meet these trading profit requirements and are contacted by HMRC will be eligible for the fourth grant. They must also have traded in both the 2019-20 and 2020-21 tax years, be currently trading but impacted by reduced demand or unable to trade because of the pandemic, declare their intention to continue trading and ‘reasonably believe’ there will be a ‘significant reduction’ in trading profits between 1 February and 30 April 2021.
Self-employed individuals applying for the fourth round of grants will need to keep evidence of the impact of Coronavirus on their business activity. They must also decide if they consider a reduction in trading profits to be ‘significant’, a decision HMRC says it cannot make because “individual and wider business circumstances will need to be considered when deciding whether the reduction is significant”. Previous grants from the SEISS do not need to be taken into account in this decision.
The application portal for the fourth grant will open in ‘late April 2021’.
A fifth grant will cover the period from May 2021 to September 2021. Unlike the first four rounds of the scheme, it will be paid at two different rates, depending on the reduction in trading profits a self-employed individual has seen. Those whose turnover has fallen by 30 per cent or more in the year to April 2021 will once again be eligible (subject to other conditions) for a grant worth 80 per cent of three months’ average trading profits capped at £7,500. Meanwhile, those whose turnover has fallen by less than 30 per cent during this period will be eligible (again subject to other conditions) for a grant worth 30 per cent of average trading profits, capped at £2,850.
Applications for the fifth round will open in late July.
Updated – 31st March 2021
Treasury issues guidance on the final two self-employed grants
More help for the self-employed has been announced, with the final two income support grants available until the end of September 2021.
The fourth taxable grant available through the self-employed income support scheme (SEISS) covers a three-month period from 1 February to 30 April 2021.
As with two of the previous SEISS grants, the fourth grant is worth 80% of three months’ average trading profits, paid out in a single instalment of up to £7,500.
The fifth grant covers May to the end of September 2021, but the amount available depends on loss of income.
Workers whose turnover has fallen by at least 30% can still apply for a grant for up to 80% of profits, up to £7,500 in total.
Those whose income has fallen by less than that can apply for a grant of 30% of trading profits, up to a cap of £2,850.
Claims for the fourth grant can be made towards the end of this month, while claims for the fifth grant will open in July.
Around 600,000 people missed out on previous grants because they had recently started working for themselves and had not filed a tax return to prove their income status.
But those who filed a 2019/20 tax return through self-assessment on or before the extended deadline at midnight on 2 March 2021 will be eligible for the new grants.
Given the volume of people who stand to qualify, HMRC is writing to around 100,000 of those asking them to complete pre-verification checks in a bid to prevent fraud.
Taxpayers will receive a letter informing them to expect a phone call from HMRC in the next 10 working days, in which they will be asked to confirm their email address and agree to receive a secure Dropbox link.
They then have two days to upload one form of identity and three months of bank statements to show their business activity before the link expires.
Contact us for advice on the SEISS.
Updated – 8th March 2021
Self-Employment Income Support Scheme fourth grant (SEISS)
In line with the further extension of the CJRS furlough scheme for employees, the chancellor has set out further support for the self-employed. In addition to the upcoming fourth grant there will also be a fifth SEISS grant covering the 5 months to 30 September.
The chancellor has extended the scheme to include certain traders who were previously excluded. Thus, those who commenced self-employment in 2019/20 will now be included provided they had submitted their 2019/20 tax return by 2 March 2021. This is potentially a further 600,000 traders.
The Budget confirmed that the fourth SEISS grant will be set at 80% of 3 months’ average trading profits, paid out in a single instalment, capped at £7,500. The fourth grant will take into account 2019 to 2020 tax returns and will be open to those who became self-employed in tax year 2019 to 2020. The rest of the eligibility criteria remain unchanged.
Conditions for the fifth grant will be linked to a reduction in business turnover. Self-employed individuals whose turnover has fallen by 30% or more will continue to receive the full grant worth 80% of three months’ average trading profits, capped at £2,500 a month. Those whose turnover has fallen by less than 30% will receive a 30% grant, capped at £950 a month. We are awaiting further details of this fifth grant.
Eligibility for the scheme will now be based on your submitted 2019 to 2020 tax return. This may also affect the amount of the fourth grant which could be higher or lower than previous grants you may have received. To be eligible for the fourth grant you must be a self-employed individual or a member of a partnership.
To work out your eligibility HMRC will first look at your 2019 to 2020 Self-Assessment tax return. Your trading profits must be no more than £50,000 and at least equal to your non-trading income.
If you are not eligible based on your 2019 to 2020 Self-Assessment tax return, HMRC will then look at the tax years 2016 to 2017, 2017 to 2018, 2018 to 2019 and 2019 to 2020.
You must also have traded in both tax years:
- 2019 to 2020 and submitted your tax return by 2 March 2021
- 2020 to 2021
You must either:
- be currently trading but are impacted by reduced demand due to coronavirus
- have been trading but are temporarily unable to do so due to coronavirus
You must also declare that:
- you intend to continue to trade
- you reasonably believe there will be a significant reduction in your trading profits due to reduced business activity, capacity, demand or inability to trade due to coronavirus
To allow HMRC to process recently submitted 2019 to 2020 Self-Assessment tax returns, the online Claims service for the fourth grant will be available from late April 2021 until 31 May 2021.
If you are eligible, HMRC will contact you in mid-April to give you your personal claim date. This will be the date that you can make your claim from.
There will be more guidance about the fourth and fifth grants in due course.
Please contact us if you want to check your eligibility and estimate your claim.
Updated – 8th February 2021
How trading conditions affect eligibility for the Self-Employment Income Support Scheme.
HMRC has updated its guidance to define what it means by reduced activity, capacity or demand or temporary closure and gives examples of how this could affect eligibility.
Claims for the third SEISS grant have now closed. The last date for making a claim for the third grant was 29 January 2021. This guidance applies to claims made during the third grant period. Details about the fourth grant will be announced on 3 March 2021.
To be able to claim for the third grant, you must either:
- be currently trading but are impacted by reduced demand due to coronavirus.
- have been trading but are temporarily unable to do so due to coronavirus.
- You must also:
- intend to continue to trade.
- reasonably believe there will be a significant reduction in your trading profits due to reduced demand or your inability to trade.
You must also meet all other eligibility criteria to make a claim.
HMRC expects claimants to make an honest assessment about whether they reasonably believe their business will have a significant reduction in profits.
Please do talk to us about making a claim or any concerns you may have.
Updated – 25th January 2021
Only a few days are left to submit applications for the third SEISS grant
Any applications for the latest round of the Self Employment Income Support Scheme (SEISS) must be submitted by the deadline on 29 January 2021.
This grant offers a taxable support payment equal to 80 per cent of the average of three months’ trading profits (up to a maximum of £7,500) to eligible individuals.
If you believe that you are eligible for this grant, you should apply immediately.
Many of those who have previously used the scheme may still be eligible, as long as they are a self-employed individual or a member of a partnership, have trading profits of no more than £50,000 per year and meet the following criteria:
You must have traded in both tax years:
- 2018/2019 and submitted your Self-Assessment tax return on or before 23 April 2020 for that year
- 2019/2020.
You must also either:
- Be currently trading but are impacted by reduced demand due to Coronavirus; or
- Have been trading but are temporarily unable to do so due to Coronavirus.
You must also declare that:
- You intend to continue trading; and
- You reasonably believe there will be a significant reduction in your trading profits.
Further clarification on what constitutes reduced demand or a significant reduction in trading profits can be found on the GOV.UK website here.
You cannot claim the grant if you trade through a limited company as a director or you operate through a trust.
To confirm your eligibility and to make an application, please use the link below:
Click here to apply for the SEISS grant
Those who have used the scheme previously or intend to apply for the latest grant should be aware that all SEISS grants are taxable in the 2020/21 tax year.
This means that no element of the SEISS grants should be reported on a 2019/20 Self-Assessment tax return, which should be filed by 31 January 2021.
Funding via a fourth grant should be available soon, which will cover the period from February to April 2021. The details of this fourth grant, including its launch date and the amount of financial support available through it, are yet to be confirmed.
Claims for the SEISS have to made by the taxpayer themselves and cannot be made by agents, such as accountants.
However, if you need support preparing a claim for the SEISS, we can assist you.
Updated – 9th November 2020
Only a few days are left to submit applications for the third SEISS grant
Any applications for the latest round of the Self Employment Income Support Scheme (SEISS) must be submitted by the deadline on 29 January 2021.
This grant offers a taxable support payment equal to 80 per cent of the average of three months’ trading profits (up to a maximum of £7,500) to eligible individuals.
If you believe that you are eligible for this grant, you should apply immediately.
Many of those who have previously used the scheme may still be eligible, as long as they are a self-employed individual or a member of a partnership, have trading profits of no more than £50,000 per year and meet the following criteria:
You must have traded in both tax years:
- 2018/2019 and submitted your Self-Assessment tax return on or before 23 April 2020 for that year
- 2019/2020.
You must also either:
- Be currently trading but are impacted by reduced demand due to Coronavirus; or
- Have been trading but are temporarily unable to do so due to Coronavirus.
You must also declare that:
- You intend to continue trading; and
- You reasonably believe there will be a significant reduction in your trading profits.
Further clarification on what constitutes reduced demand or a significant reduction in trading profits can be found on the GOV.UK website here.
You cannot claim the grant if you trade through a limited company as a director or you operate through a trust.
To confirm your eligibility and to make an application, please use the link below:
Click here to apply for the SEISS grant
Those who have used the scheme previously or intend to apply for the latest grant should be aware that all SEISS grants are taxable in the 2020/21 tax year.
This means that no element of the SEISS grants should be reported on a 2019/20 Self-Assessment tax return, which should be filed by 31 January 2021.
Funding via a fourth grant should be available soon, which will cover the period from February to April 2021. The details of this fourth grant, including its launch date and the amount of financial support available through it, are yet to be confirmed.
Claims for the SEISS have to made by the taxpayer themselves and cannot be made by agents, such as accountants.
However, if you need support preparing a claim for the SEISS, we can assist you.
Updated – 9th November 2020
Government increases self-employed support scheme (SEISS)
As the lockdown has now started for England and continues elsewhere, the Government has changed its mind again about business supports and decided to extend the Self-Employment Income Support Scheme (SEISS) across all regions of the UK.
Support for millions more workers through the Self-Employment Income Support Scheme (SEISS) will be increased, with the third grant covering November to January calculated at 80% of average trading profits, up to a maximum of £7,500.
It is only available to self-employed individuals who were eligible for the previous payments.
The Government said third-tranche payments will be made more quickly, with the claims window being brought forward from 14 December 2020 to 30 November 2020.
The Government has already announced that there will be a fourth SEISS grant covering February to April. The Government will set out further details, including the level, of the fourth grant in due course.
More information from the Government announcement can be seen here:
Updated – 3rd November 2020
Further updates to the Self-Employment Income Support Scheme (SEISS)
Further to the article below – the Government has decided to increase the total grant from 40 per cent to 55 per cent of trading profits for November to January, while the grant will be capped at £5,160.
To confuse matters slightly, in Parliament, the Prime Minister announced that support to the self-employed would increase from 40 per cent of trading profits to 80 per cent for November. As this would only be for just one month and claims are made over three, the amount available in total for the period has been adjusted to account for this.
To ensure that those who need support get it as soon as possible, payments will be made more quickly, with the claims window being brought forward from 14 December to 30 November.
The level of the second SEISS grant, running from 1 February 2021 until 30 April 2021, will be reviewed by the Government and set in due course.
To help businesses prepare for the changes resulting from national lockdown in England, the Government has produced a helpful factsheet.
Click here to download the latest factsheet
If you require support with any of the schemes recently announced or outlined in this update, please contact us.
Updated – 26th October 2020
Self Employed Income Support Scheme increased
In his earlier Winter Economy Plan, the Chancellor had confirmed that the Self-Employed Income Support Scheme (SEISS) would be extended into 2021 with the payment of two new taxable grants.
He has now confirmed that the first of the extended grants, which will cover the three months from November to January will increase from 20 per cent of previous trading profits, capped at £1,875 to 40 per cent of previous trading profits capped at £3,750.
The second of the new SEISS grants will cover three months from the start of February until the end of April 2021. The level of the second grant will be set by the Government in due course.
Updated – 21st October 2020
Latest SEISS grants introduce new qualifying conditions
As part of the Government’s plan to extend the Self-Employment Income Support Scheme (SEISS) for a further six months, HM Revenue & Customs (HMRC) has announced new conditions that must be met.
The scope of the extended scheme will now be much narrower, with the third and fourth grants being less generous for the self-employed.
For example, the third grant will provide a taxable grant covering 20 per cent of average monthly trading profits, paid out in a single instalment covering three months’ worth of profits – capped at £1,875 in total.
Since being announced in the Chancellor’s Winter Economy Plan, further details have now emerged about the SEISS grant extension in an HMRC factsheet.
These explain that to qualify for the additional grants in the coming months, applicants must meet these additional criteria:
- Be currently eligible for the SEISS (although it is not necessary to have claimed the previous grants);
- Declare that they are currently actively trading and intend to continue to trade;
- Declare that they are impacted by reduced demand due to COVID-19 in the qualifying period.
These measures will seek to amend or work alongside the existing SEISS eligibility requirements, which state that a taxpayer will be eligible where they:
- Submitted their Self-Assessment tax return for the tax year 2018/19 by 23 April 2020;
- Traded in the tax year 2019/20;
- Intend to continue to trade in the tax year 2020/21;
- Carry on a trade which has been adversely affected by Coronavirus.
An applicant’s trading profits must still also be no more than £50,000 and more than half of their total income for either:
- The tax year 2018/19; or
- The average of the tax years 2016/17, 2017/18, and 2018/19.
The main additions to the new qualifying criteria are that the taxpayer is “actively trading” and has been “impacted by reduced demand”.
The requirement to be actively trading will most likely mean that businesses that have had to close during the pandemic will not be able to claim if they have not restarted during the qualifying period.
HMRC has confirmed that the qualifying period for the third grant runs from 1 November to the date of a claim and the qualifying period for the fourth grant is also expected to run from 1 February 2021 to the date of that claim.
HMRC is expected to publish further guidance to clarify the meaning of the new terms included within the eligibility criteria soon. We will aim to keep you updated when this information is released.
Link:
Self-Employment Income Support Scheme (SEISS) Grant Extension Factsheet
Updated – 28th September 2020
Self-employed income support scheme
The existing self-employed grant (SEISS) will also be extended on the same basis as the job support scheme.
An initial taxable grant will be provided to those who are currently eligible for SEISS and are continuing to actively trade but face reduced demand due to coronavirus. The initial lump sum will cover three months’ worth of profits for the period from November to the end of January next year. This is worth 20% of average monthly profits, up to a total of £1,875.
An additional second grant, which may be adjusted to respond to changing circumstances, will be available for self-employed individuals to cover the period from February 2021 to the end of April.
Updated – 01 September 2020
Penalties for breaches of furlough and self-employment scheme rules confirmed
HM Revenue & Customs (HMRC) has set out full details of the penalties that will apply to employers and self-employed individuals who are found to have breached the rules of the Coronavirus Job Retention Scheme (CJRS) and Self-Employment Income Support Scheme (SEISS).
A factsheet published by HMRC confirms that employers that have over claimed CJRS grants and have not made a repayment should notify HMRC by the latest of:
- 90 days after receiving the grant they were not entitled to;
- 90 days after a change of circumstances that meant they could not retain a grant; or
- 20 October 2020.
HMRC says that employers that were not aware they had been overpaid when they received the grant or when circumstances changed will not be charged a penalty. However, they will need to repay the amount overpaid.
Where HMRC finds that an employer has received an overpayment, it will carry out an assessment of an Income Tax charge to recover the overpayment. This will be equal to the amount overpaid, or not used within a reasonable period to make furlough payments to employees or to cover associated costs. The charge must be repaid within 30 days, after which interest and penalties will apply.
If an overpayment has been received, but HMRC has not made an assessment, employers must detail the overpayment on their Corporation Tax return or Self-Assessment tax return.
Where a company has received an overpayment and the company officers knew of an over claimed CJRS grant when it was received, or another time when a tax liability arose, or they were aware that the grant was not used for its intended purpose, and the repayment cannot be recovered from the company because of insolvency, company officers can be made personally liable for the amount owed.
If an employer fails to notify HMRC within the relevant period, a penalty of up to 100 per cent of the CJRS grant they received but were not entitled to and which they do not repay by the last day of the notification period, will be charged. This means employers could have to pay more than twice the amount of an overpayment in these circumstances.
Deliberate defaulters could also have their details published under the Publishing Details of Deliberate Defaulters (PDDD) policy.
Specific arrangements apply to partnerships. Partners will be held jointly and severally liable for the overpayment. If HMRC does not issue an assessment, one of the partners will need to include the charge on their 2020-21 Self-Assessment Tax Return.
Meanwhile, HMRC has published a separate factsheet detailing penalty arrangements for the SEISS.
Self-employed individuals in receipt of an overpayment or a grant they were not entitled to must notify HMRC by the later of:
- 20 October 2020; or
- 90 days after receiving the grant.
As with CJRS overpayments, HMRC will issue tax assessments for overpayments that have not been repaid. These will need to be paid within 30 days to avoid interest and penalties being applied.
Self-employed individuals who are concerned about making a payment can contact HMRC’s Payment Support Service on 0300 200 3835.
Where an overpayment has been repaid, it does not need to be included on a 2020-21 Self-Assessment Tax Return. However, self-employed individuals who have received an overpayment but do not receive a tax assessment should include it on their 2020-21 Self-Assessment Tax Return.
If a self-employed individual does not notify HMRC of an overpayment within the notification period, they will be charged a penalty, based on the overpaid amount owing on the last day of the notification period.
Penalties will only apply to self-employed individuals who were not eligible for the grant and were unaware that this was the case if they do not repay the grant by 31 January 2022.
Furthermore, specific arrangements apply to partners and partnerships in receipt of overpayments or grants they were not entitled to, with partners held jointly and severally liable for overpayments or claims they were not eligible for that were subsequently paid into the partnership.
Where a self-employed individual or partner does not agree with HMRC’s assessment, it is open to them to appeal against the decision, through a process set out in the guidance.
Link: Self-Employment Income Support Scheme – receiving grants you were not entitled to
Link: Coronavirus Job Retention Scheme – Receiving grants you were not entitled to
Updated – 19th August 2020
How HMRC works out trading points and non profit trading income for self employment income support scheme
Find out how HMRC will work out your trading profits and non-trading income if you are self-employed or a member of a partnership and have been adversely affected by coronavirus (COVID-19).
How different circumstances affect the self-employment income support scheme
If you are self-employed or member of a partnership find out how your circumstances can affect your eligibility for the scheme.
Speak to us if you need any assistance.
Updated – 5th August 2020
Ask HMRC to verify you had a new child which affected your eligibility for the self-employment income support scheme
If you are self-employed or a member of a partnership, and having a new child affected the trading profits or total income you reported for the tax year 2018 to 2019, use the HMRC form to ask them to verify that you had a new child.
If you are already eligible for the grant based on your 2016 to 2017, 2017 to 2018 and 2018 to 2019 Self-Assessment tax returns, how HMRC will work out your grant amount will not be affected.
If you are not already eligible you can ask HMRC to check if you had a new child which either:
- affected your trading profits or total income you reported for the tax year 2018 to 2019
- meant you did not submit a Self-Assessment tax return for the tax year 2018 to 2019
For this scheme having a new child is any of the following:
- being pregnant
- giving birth (including a stillbirth after more than 24 weeks of pregnancy) and the 26 weeks after giving birth
- caring for a child within 12 months of birth if you have parental responsibility
- caring for a child within 12 months of adoption placement
You must have been self-employed in the tax year 2017 to 2018 and have submitted your Self-Assessment tax return on or before 23 April 2020.
You must also meet all other eligibility criteria.
Updated – 3rd August 2020
Applications open for second phase of self-employed income support
The second and final round of grants under the self-employed income support scheme (SEISS) opened this month, offering a smaller lump sum grant.
From 17 August 2020, self-employed individuals who meet the scheme requirements will be able to access HMRC’s online service and claim up to £6,570 to cover three months’ worth of profits.
This lump sum will be worth 70% of their average monthly trading profits, which is 10% less than previous instalments.
The scheme is available to people who are self-employed or a member of a partnership, who meet the conditions set out by HMRC.
These include having traded in the 2018/19 tax year and submitted a self-assessment tax return either on or before 23 April 2020 for that year, having traded in 2019/20, and intending to continue trading in 2020/21.
Individuals making a claim will be required to confirm their business was adversely affected by coronavirus on or after 14 July 2020.
HMRC’s guidance says business owners should not make a claim based on adverse effects they think may happen in the future, but notes that “if your business recovers after you’ve claimed, your eligibility will not be affected”.
To date, 2.4 million self-employed workers have claimed a total of £7 billion on the scheme.
Speak to us about coronavirus-related support.
Updated – 29th July 2020
Self-employment income support scheme (SEISS) update
The scheme is now closed to new claims for the first grant. However, the scheme has been extended. If you were eligible for the first grant and can confirm to HMRC that your business has been adversely affected on or after 14 July 2020, you will be able to make a claim for a second and final grant from 17 August 2020. You can make a claim for the second and final grant if you are eligible, even if you did not make a claim for the first grant. The online service is not available yet.
If you are eligible you will be able to make a claim for a second and final grant from 17 August 2020. HMRC will contact you if you’re eligible.
If you made a claim in error as you were not eligible for the grant, have been overpaid or would like to make a voluntary repayment, tell HMRC and pay some or all of the grant back.
Please talk to us if you are intending to make a claim as we have a calculator to assist you.
Updated – 14th July 2020
HM Revenue & Customs updates Self-Employment Income Support Scheme guidance
Ahead of the second round of funding for the Self-Employment Income Support Scheme (SEISS) opening for applications on 17 August, HM Revenue & Customs (HMRC) has updated its guidance documents relating to the scheme.
The first round of applications for SEISS grants closed on Monday 13 July 2020 and had allowed self-employed individuals to claim grants worth up to 80 per cent of their usual trading profits over three months, capped at £7,500.
The second round of SEISS grants will be worth up to 70 per cent of usual trading profits over three months, capped at £6,570.
The eligibility criteria remain substantially the same as for the first round of funding, with applicants required to have annual trading profits of no more than £50,000, at least equal to their income from non-trading sources.
Self-employed individuals will need to have been adversely affected by the Coronavirus outbreak on or after 14 July 2020, because, for example:
- They are unable to work because they:
- are shielding
- are self-isolating
- are on sick leave because of coronavirus
- have caring responsibilities because of coronavirus
- They have had to scale down, temporarily stop trading or incurred additional costs because:
- their supply chain has been interrupted
- they have fewer or no customers or clients
- their staff are unable to come in to work
- one or more of their contracts have been cancelled
- they had to buy protective equipment so you could trade following social distancing rules
As with the first round of the scheme, HMRC says it will contact self-employed individuals that it believes will be eligible. However, it has warned people to be alert to the possibility of fraudulent texts, calls or emails purporting to be from HMRC and asking them to click a link or provide personal information.
HMRC has also launched a new service for people who were in receipt of the first grant but believe either that they were overpaid or that they were not, in fact, eligible to make repayments. Repayments can be made online here.
Updated – 3rd July 2020
UPDATED: How different circumstances affect the self-employment income support scheme
The Government has updated the guidance for self-employed or member of a partnership to explain how certain circumstances can affect your eligibility for the scheme.
The Self-Employment Income Support Scheme currently allows you to claim a taxable grant worth 80% of your average monthly trading profits, paid out in a single instalment covering 3 months’ worth of profits, and capped at £7,500 in total. If you are eligible you must make your claim for the first grant on or before 13 July 2020.
This scheme is being extended until 19 October 2020. You will be able to claim a second and final grant from 17 August 2020 when the online service will be available.
HMRC will work out your eligibility the same way as the first grant. If you make a claim for the second grant you will have to confirm your business has been adversely affected on or after 14 July 2020.
This grant will be a taxable grant worth 70% of your average monthly trading profits, paid out in a single instalment covering a further 3 months’ worth of profits, and capped at £6,570 in total.
You can claim for the second and final grant even if you did not make a claim for the first grant.
The online service for the second and final grant is not available yet. We will update you when the second grant is available. In the meantime see:
Updated – 30th June 2020
Self-employed grants ‘are liable for tax and national insurance’
Recipients of self-employed income support grants may not realise they are taxable, a tax group has warned.
The grants are worth up to 80% of trading profits, paid in a lump sum to cover three months, and capped at £7,500.
More than 2.6 million lump sums worth £7.6 billion had been provided through the scheme up to 21 June 2020, equating to in excess of half the UK’s entire self-employed population.
Up to a third of those grants may have to be repaid in income tax and class 4 National Insurance contributions (NICs) in a 2020/21 tax return, due on or before midnight on 31 January 2022.
The Low Incomes Tax Reform Group (LITRG) fears recipients may assume the lump sums are exempt from income tax and NICs as they are labelled ‘grants’.
The LITRG said self-employed subcontractors in the construction industry will need to watch out for the grants being paid without tax taken off.
This is different to their other income, which is usually taxed before they receive it, and may mean they miss out on their usual refund after submitting their 2020/21 tax return.
Victoria Todd, head of LITRG, said:
“Many claimants might use the money as soon as they get it, for example, to catch up on liabilities or to meet essential living costs – but they need to think now about budgeting for income tax and NICs on it.
“The timing of the grants – early in the tax year – means that individuals might have to forecast their total taxable profits for 2020/21, so they can estimate the amount of tax and NICs due on the grant.
“For many, this is likely to be 20% income tax and 9% Class 4 NICs.
“HMRC needs to publicise that the grants are chargeable to income tax and NICs, to reduce the risk of people getting higher-than-expected tax bills.”
We can handle your 2020/21 tax return.
Updated – 12th June 2020
How different circumstances affect the self-employment income support scheme
The Self-Employment Income Support Scheme currently allows you to claim a taxable grant worth 80% of your average monthly trading profits, paid out in a single instalment covering 3 months’ worth of profits, and capped at £7,500 in total.
If you are self-employed or member of a partnership find out how your circumstances can affect your eligibility for the scheme.
If you are eligible you must make your claim for the first grant on or before 13 July 2020. This scheme is being extended. Different circumstances may affect your eligibility.
How the grant works
If you receive the grant you can continue to work, start a new trade or take on other employment including voluntary work, or duties as an armed forces reservist.
The grant does not need to be repaid but will be subject to Income Tax and self-employed National Insurance.
HMRC will work out if you are eligible and how much grant you may get. But you can follow these steps to help you understand how we will do this and what you can do now.
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.
If you are not eligible based on the 2018 to 2019 Self-Assessment tax return, they will then look at the tax years 2016 to 2017, 2017 to 2018, and 2018 to 2019.
Find out how HMRC will work out your eligibility including if they have to use other years here:
Grants under the Self-Employment Income Support Scheme are not counted as ‘access to public funds’, and you can claim the grant on all categories of work visa.
You must make the claim yourself. Your tax agent or adviser must not claim on your behalf as this will trigger a fraud alert, and you will have to contact HMRC. This will cause a significant delay to you receiving your payment.
How different circumstances affect the scheme:
Check if your circumstances affect your eligibility for the following situations:
- if your return is late, amended or under enquiry
- if you are a member of a partnership
- if you are on or took parental leave
- if you have loans covered by the loan charge
- if you claim averaging relief
- if you are non-resident or chose the remittance basis
- state aid
- adversely affected examples
Updated – 19th May 2020
Self employed deferment of second payment on account
Option for self-employed to defer their second payment on account due 31 July 2020
Choose how and when you can delay making your second payment on account for the 2019 to 2020 tax year.
You have the option to defer your second payment on account if you are:
- registered in the UK for Self-Assessment and
- finding it difficult to make your second payment on account by 31 July 2020 due to the impact of coronavirus
You can still make the payment by 31 July 2020 as normal if you are able to do so.
HMRC will not charge interest or penalties on any amount of the deferred payment on account, provided it is paid on or before 31 January 2021.
If you want to pay in full
You can pay your second payment on account bill in full any time between 31 July 2020 and 31 January 2021 using the online service.
If you want to pay in instalments
You need to contact HMRC if you already have overdue tax which you are paying through a Time to Pay instalment arrangement and want to include your second payment on account in that arrangement.
If you do not have other overdue taxes, you can make your payment in instalments any time between now and 31 January 2021 by setting up a budget payment plan.
Payments made by Direct Debit
If you choose to defer and normally make your payments on account by Direct Debit, you should cancel your Direct Debit through your bank as soon as possible so that HMRC will not automatically collect any payment due. You can cancel online if you are registered for online banking.
After the deferral ends
The usual interest, penalties and collection procedures will apply to missed payments.
How to get help
If you are still struggling to pay your tax bill by 31 January 2021, or you’re experiencing other financial difficulties you can contact HMRC’s Time to Pay service.
Telephone: 0300 200 3835
Link:
Updated – 5th May 2020
Self Employment Income Support Scheme (SEISS)
The Government have recently updated their guidance as to how claims under the Self Employment Income Support Scheme is to be managed. This scheme is designed to provide a grant to self-employed people enabling them to claim 80% of their average profits over the last three tax years, with the grant capped at £7500, but subject to certain conditions, including excluding those with profits over £50,000 or with over 50% of their income coming from other sources.
The new guidance makes it clear that the tax payer has to make this claim and this can’t be done by their agents. There are a number of pieces of information that have to be provided and you will have to set up a personal tax account, if you do not already have one, but you can also check your eligibility before making the claim.
Please note that It is possible for your agent to run the eligibility check for you. We can also assist clients with providing the necessary information required for the claim.
The details of the scheme can be found here.
Please contact your usual point of contact should you have any queries regarding this.
Updated 21st April – 2020
Government SEISS guidance updated
To help people that are eligible for the Self-Employed Income Support Scheme (SEISS) the Government has updated its guidance to confirm essential points.
Tax
The grant will be subject to Income Tax and National Insurance contributions but does not need to be repaid.
Universal Credit
Many people awaiting payment from the SEISS grant may have made applications for Universal Credit. The Government has confirmed that you should record the grant as part of your self-employment income and that it may affect the amount of Universal Credit you get. However, it will not affect Universal Credit claims for earlier periods.
Eligibility
Alongside the existing conditions outlines in its previous guidance, HMRC has said that self-employed people will have to confirm that their trading has been adversely affected by Coronavirus. To assess this the tax authority will use a ‘risk-based approach’ to compliance.
Self-Assessment extension
If you have not submitted your Self-Assessment tax return for the tax year 2018 to 2019, you must do this by 23 April 2020 or you will not be able to claim. HMRC has confirmed that it will review any late returns in the usual way.
This is important as HMRC will use data from 2018-2019 tax returns to identify those eligible.
Loan charge
If you are self-employed and have received payment in the form of a loan or any other form of credit covered by the loan charge, you may be able to apply for the grant.
However, your eligibility and average trading profits will be based on either:
- the average of the tax years 2016 to 2017 and 2017 to 2018
- the tax year 2017 to 2018 if you were not self-employed in the tax year 2016 to 2017
You also do not have to file your 2018 to 2019 Self-Assessment tax return by 23 April 2020. You should file by the 30 September 2020.
Claims process
Self-employed individuals are unable to claim until HMRC has contacted them to confirm eligibility. The tax authority has said that it aims to contact those that are eligible by mid-May and will invite people to claim using the GOV.UK online service, which is currently being developed.
If you’re unable to claim online an alternative way to claim will be made available to you, details of which HMRC hopes to announce soon. You should not contact HMRC, as it has said this will only delay the urgent work being undertaken to introduce the scheme.
Once a claim is processed
Once HMRC has received a claim and the grant is approved, it will contact you to tell you how much you’ll get and the payment details. HMRC has re-iterated that it will make payments by early June 2020.
How total income and trading profits will be calculated for the Self-Employed Income Support Scheme
You can claim for the Self-employment Income Support Scheme (SEISS) if you’re a self-employed individual or a member of a partnership and you:
- have submitted your Self-Assessment tax return for the tax year 2018 to 2019
- traded in the tax year 2019 to 2020
- are trading when you apply, or would be except for coronavirus
- intend to continue to trade in the tax year 2020 to 2021
- have lost trading profits due to coronavirus
To be eligible for the scheme your trading profits must also be no more than £50,000 and more than half of your total income for either:
- the tax year 2018 to 2019
- the average of the tax years 2016 to 2017, 2017 to 2018, and 2018 to 2019
HMRC has confirmed that eligibility and how the grant is paid will be based on your total income and trading profits and has released detailed guidance on what will count.
Calculating trading profits
HMRC will use the figures on your tax returns for your total trading income, more commonly referred to as turnover and deduct all allowable business expenses and capital expenditure.
The expenses include:
- office costs
- travel costs
- clothing expenses
- staff costs
- things bought to sell on
- financial costs
- costs of your business premises
- advertising or marketing
- training courses
HMRC will also take into consideration:
- any business expenses deducted through the trading allowance
- capital allowances used to buy assets used in your business
- qualifying care relief
- flat rate expenses
Any losses carried forward from previous years and the personal allowance will not be deducted from trading profits.
Calculating Total Income
HMRC will also consider other income reported on your self-assessment return. Your total income is the total of all your:
- income from earnings
- trading profits
- property income
- dividends
- savings income
- pension income
- miscellaneous income (including social security income)
Eligibility
Your trading profits must be no more than £50,000 and more than half of your total income for either:
- the tax year 2018 to 2019
- the average of the tax years 2016 to 2017, 2017 to 2018, and 2018 to 2019
To help people interpret these rules, HMRC has published helpful examples online that demonstrate how the rules will be applied, which can be found by clicking here.
You cannot apply for this scheme yourself. HMRC will aim to contact you by mid-May 2020 if it believes you are eligible and will make payments by early June 2020.
If you are not contacted but believe you may be eligible for the scheme, please speak to our team at the earliest opportunity.
Updated – 15th April 2020
Detailed guidance published on the Self-Employed Income Support Scheme
HM Revenue & Customs (HMRC) has published detailed guidance on the working of the Self-Employed Income Support Scheme (SEISS), which was announced by the Chancellor as part of the Government’s response to the economic impact of the coronavirus crisis.
SEISS will pay self-employed individuals an amount equivalent to up to 80 per cent of their average monthly trading profits, capped at £2,500, to cover at least the three months from March. The amount will be paid in a single lump-sum and will be based upon tax returns from 2016-17, 2017-18 and 2018-19.
Crucially, self-employed individuals will still be able to do business while they are in receipt of a grant from the scheme.
To qualify for the scheme, a self-employed individual must have trading profits of no more than £50,000 and must receive the majority of their income from self-employment. They must also have submitted a Self-Assessment Tax Return for 2018-19. Anyone who has missed the deadline has until 23 April 2020 to do so before they become ineligible for the scheme.
The new guidance confirms that HMRC will use turnover figures provided on tax returns and then to calculate trading profit, it will deduct expenses including:
- Office costs
- Travel costs
- Clothing expenses
- Staff costs (for example, in the case of a partnership)
- Things bought to sell on
- Financial costs, such as insurance or bank charges
- Costs of business premises
- Advertising and marketing, such as website costs
- Training courses
- Business expenses deducted through the trading allowance
- Capital allowances, used to buy assets used in the business
- Qualifying care relief
- Flat rate expenses.
At the same time, HMRC has confirmed that it will not deduct losses carried forward from previous years from trading profits, nor will it deduct an individual’s personal allowance.
Applications to the scheme are expected to open in mid-May 2020 via an online portal. HMRC will contact self-employed individuals it identifies as being eligible with details of how to apply.
HMRC has also issued a fraud warning, saying that texts, calls or emails claiming to be from HMRC and asking people to click a link to provide personal information will be a scam.
Updated – 27th March 2020
Coronavirus Self Employed Income Support Scheme (CSEISS)
Following the announcement that businesses will be reimbursed by HM Revenue & Customs (HMRC) for 80 per cent of the employment costs of ‘furloughed’ workers for at least three months from March, the Chancellor has announced a similar scheme for self-employed individuals.
The Self-Employed Income Support Scheme (CSEISS) will pay self-employed individuals an amount equivalent to up to 80 per cent of their average monthly trading profits, capped at £2,500, to cover at least the three months from March. The amount will be paid in a single lump-sum and will be based upon tax returns from 2016-17, 2017-18 and 2018-19.
Crucially, self-employed individuals will still be able to do business while they are in receipt of a grant from the scheme.
To qualify for the scheme, a self-employed individual must have trading profits of no more than £50,000 and must receive the majority of their income from self-employment. They must also have submitted a Self-Assessment Tax Return for 2018-19. Anyone who has missed the deadline will have four weeks from 26 March 2020 to do so before they become ineligible for the scheme.
People who pay themselves a salary and dividends through their own company will not be eligible for the scheme, but could be eligible for the Coronavirus Job Retention Scheme if they use PAYE.
HMRC will contact everyone eligible for the scheme directly, inviting them to apply for the support via an online portal. The Chancellor said that the first payments will be made at the beginning of June 2020.
The full criteria for qualification for the scheme are:
- Be self-employed or a member of partnership;
- Have lost trading/partnership trading profits due to COVID-19;
- File a tax return for 2018-19 as self-employed or a member of a trading partnership. Those who have not yet filed for 2018-19 will have an additional 4 weeks from this announcement to do so;
- Have traded in 2019-20; be currently trading at the point of application (or would be except for COVID 19) and intend to continue to trade in the tax year 2020 to 2021
- Have trading profits of less than £50,000 and more than half of your total income come from self-employment. This can be with reference to at least one of the following conditions:
- Your trading profits and total income in 2018/19
- Your average trading profits and total income across up to the three years between 2016-17, 2017-18, and 2018-19.
Further details are available here.[/vc_column_text][/vc_column][/vc_row]