A guide to the Self-Employed Income Support Scheme (SEISS)
The Self-employment Income Support Scheme (SEISS) is a temporary scheme set up by the government to help self-employed people.
It was initially set up for three months, but it may be extended, to help the self-employed survive the coronavirus pandemic.
While you’ll still owe Income Tax and National Insurance on any money you get through the SEISS, it’s a grant rather than a loan.
This means you won’t need to pay it back.
How much will you get under the SEISS?
SEISS gives self-employed people and members of partnerships the following support:
- 80 per cent of your average monthly trading profits (more on this below) for three months
- up to a maximum of £7,500
- a payment in one instalment, subject to Income Tax and self-employed National Insurance,
How to work out your trading profits for SEISS?
- HMRC works out your average trading profit by taking your total trading profits or losses for tax years 2016-17 + 2017-18 + 2018-19 and dividing by three.
If you’re self-employed, HMRC will work out your trading profit after allowable business expenses.
They’ll do this by adding any losses brought forward from previous tax years to the amount shown on your tax return as ‘total taxable profits from this business’.
If you’re a member of a partnership, HMRC will work out your share of the partnership’s profit after adjustments.
Who can claim under the Self-Employed Income Support Scheme?
The scheme has been set up to provide financial support to self-employed people and people in partnerships who’ve been ‘adversely affected’ by the coronavirus pandemic.
HMRC will work out if you’re eligible, but you can use the online eligibility checker to find out the likely outcome.
Make sure you have your Self-Assessment Unique Taxpayer Reference (UTR) number and National Insurance number to hand.
You need to:
- have traded in tax year 2018-19 and submitted your 2018-19 Self-Assessment tax return on or before 23 April 2020
- have traded in tax year 2019-20
- intend to keep trading in tax year 2020-21
- carry on a trade that’s been ‘adversely affected’ by coronavirus
- take in trading profits of no more than £50,000
- make more than half of your income from being self-employed
- If you didn’t submit your 2018-19 Self-Assessment tax return by 23, April 2020 you won’t be able to claim SEISS.
What does ‘adversely affected by coronavirus’ mean?
According to the government website, ‘adversely affected’ means, for example:
You can’t work because:
- you’re shielding
- you’re self-isolating
- you’re on sick leave because of coronavirus
- you have caring responsibilities because of coronavirus
- You’ve reduced or temporarily stopped trading because:
- your supply chain has been interrupted
- you have fewer or no customers or clients
- your staff can’t come in to work
- How do I apply for the SEISS?
- The government website says you’ll be able to use the online service from 13 May 2020. If you’re eligible, you’ll be told the date you’ll be able to claim from.
Make sure you have the following information to hand when you claim:
- Self-Assessment UTR
- National Insurance number
- Government Gateway user ID and password
- bank account number and sort code (which must accept BACS payments)
- When will SEISS payments be paid?
- You’ll find out whether you’ll get the grant as soon as you’ve made your SEISS claim. If they approve your claim, the money should come through within six working days.
Make sure you keep a copy of all records associated with your claim, the same as you would for all your other self-employed records. You should keep a record of:
- the amount you claimed
- your claim reference number
- evidence that your business has been adversely affected by coronavirus
- This is so you can report your grant:
- on your Self-Assessment tax return
- as self-employed income if you claim Universal Credit
- as self-employed income if you claim tax credits
- Can I keep working if I get SEISS?
- Unlike furloughed employees under the CJRS, the SEISS allows self-employed people to continue working. You’re also free to start a new trade, employment, volunteering, or be an armed forces reservist.
As ever, The Hollies Bookkeeping Services is here to help you with any of the above and any other accounting or bookkeeping queries you may have.
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