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COVID-19 Advice for business - Self Employed Income Support Scheme (SEISS) - news article image

COVID-19 Advice for business - Self Employed Income Support Scheme (SEISS)

27 Mar 2020

3 minute read

The Chancellor Rishi Sunak has finally announced the measures the UK Government is to take, to help self-employed business people cope with the financial impact of the Coronavirus.

Are you eligible ?

The scheme the Chancellor has announced is expected to cover about 95% of current self-employed business people, but there are a number of self-employed who will not be covered. For example directors and shareholders of limited companies who remunerate themselves by way of dividends and salary. The following are also deemed excluded from the scheme:

  • Those who are newly self-employed and haven’t yet submitted a Tax Return
  • Those who have not yet submitted their 2018/19 Tax Returns (but there is still time to do this within the next 30 days and this will give eligibility to the scheme – by 23 April 2020.)
    Those with a taxable trading profit of over £50,000 in 2018/19, or more than £50,000 on average for the past three years 
  • Those whose self-employment income forms less than 50% of their overall income

Further to the above HMRC have clarified the position and suggest if you are self employed or a member of a partnership you can apply if you:• Have traded in the tax year 2019/20

  • Are trading when you apply, or would expect to bbe if not for Coronavirus
  • Intend to continue to trade in the tax year 2020/21
  • Have lost trading profits due to Coronavirus.

What you will receive ?

For those that are eligible, the Government will pay a grant, in June but back-dated to March of 80% of their average monthly profits for the past three years, or their profits in 2018/19. There will be a cap of £2,500 per month. For Partners the income test will be based on their share of the Partnership profits. This income will be taxable and therefore will need to be shown on individuals 5 April 2021 income tax returns. It will also form part of your income for tax credit purposes. The scheme will be open for an initial three months and will then be reviewed.

When will you receive the money ?

The government have suggested that the system will be open in June 2020 and then payments will be made in a single lump sum payment. There is no indication how long the payment will take to process.

How to apply

  • HMRC will invite applications using information they already hold on the Tax Return system to identify those eligible. Therefore, if you are eligible, you do not need to contact HMRC, as they will be in touch with you
  • Once the application has been made, HMRC will pay the due amount into your bank account; you will need to give HMRC your bank details when you complete the application form
  • HMRC point out that you will access the scheme through the .GOV website and that people should avoid calls, texts, emails as scams.

For all our clients, we will have all your Tax Return data on our files, so if you are anxious to know if you would be eligible for a payment through this scheme we can calculate the relevant income figures for you. Please get in touch by calling your normal contact point at our firm. If you are not eligible for a payment under this scheme, then you can consider the other “safety-nets” in place such as Universal Credit, interest-free bank loans, payment holidays etc.

COVID-19 Advice for business - Self Employed Income Support Scheme (SEISS) - news article image

Author:

James Painter

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