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Coronavirus Self Employed Income Support Scheme (SEISS)
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 (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 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, while fuller guidance on the scheme is available here.
Contact us today for further information.