The Self-Employment Income Support Scheme (SEISS) was made available to provide financial support for individuals who are self-employed or a member of a partnership, who meet the eligibility conditions and have been adversely affected by coronavirus (COVID-19). Applications for the first grant under the SEISS closed on 13 July 2020.
Following the extension of the SEISS by the Chancellor those individuals eligible for the first grant will be able to claim a second and final grant from 17 August 2020 provided they have been adversely affected by coronavirus on or after 14 July 2020. Eligible individuals can make a claim for the second grant even if they did not make a claim for the first grant.
The second SEISS grant will enable taxpayers to claim a taxable grant of 70% of average monthly trading profits, paid out in a single instalment covering 3 months, capped at £6,570 in total. Claims must be made on or before 19 October 2020.
The second SEISS grant will only be available to eligible individuals who are self-employed or a member of a partnership. The eligibility conditions are the same as for the first grant and individuals can claim the second grant even if they did not apply for the first grant.
Who can make a claim?
Individual taxpayers can make a claim for SEISS if they meet the following conditions:
- they traded in the tax year 2018/19 and submitted their Self-Assessment tax return on or before 23 April 2020 for that year;
- they traded in the tax year 2019/20;
- they intend to continue to trade in the tax year 2020/21; and
- they carry on a trade which has been adversely affected by coronavirus.
Eligibility for the scheme:
If taxpayers have established that they can make the claim, the conditions for eligibly for SEISS are based on their 2018/19 Self-Assessment tax return trading profits as follows:
- They must be no more than £50,000;
- They must be at least equal to non-trading income;
- If they are not eligible based on the 2018/19 Self-Assessment tax return, HMRC will then look at the tax years 2016/17 and 2017/18.
Taxpayers can access HMRC’s eligibility checker on the following link https://www.tax.service.gov.uk/self-employment-support/enter-unique-taxpayer-reference where taxpayers will be required to add their Tax Reference UTR and National Insurance number.
How much will be paid?
Taxpayers will get a taxable grant based on their average trading profit over the 3 tax years; 2016/17, 2017/18 and 2018/19. HMRC will work out the average trading profit by adding together the total trading profits or losses for the 3 tax years, then dividing it by 3. The grant will be 70% of their average monthly trading profits, paid out in a single instalment covering 3 months, and capped at £6,570 in total. The online service will tell the individual how HMRC have worked the grant out when the application is made.
How does a taxpayer make a claim?
Taxpayers will need to have the following details to hand to make a claim:
- Self-Assessment UTR;
- National Insurance number;
- Government Gateway user ID and password;
- Bank account number and sort code you want HMRC to pay the grant into. This must be a bank account details where a Bacs payment can be accepted.
Individuals will also have to confirm to HMRC that their business has been adversely affected by coronavirus on or after 14 July 2020 and if the grant is claimed HMRC will treat this as confirmation they are below the state aid limits.
The HMRC online service will be open to taxpayers from 17 August 2020 and HMRC will issue further details on how taxpayers can make a claim and when payments can be expected closer to this date. HMRC will also be contacting self employed taxpayers whom they consider may be eligible.
As for the first grant agents will be unable to make a claim on behalf of taxpayers so individuals will need to make their own arrangements to make a claim.
Practical issues to consider when making a claim for SEISS:
- If taxpayers have other income such as from pensions, rental profits or large dividends they may not be eligible;
- Those that are not eligible for SEISS may need to seek alternative support;
- The claim must be completed personally as it is not possible for agents to process the claim on their behalf;
- If individuals do not have a Government Gateway ID it can created when they make a claim;
- HMRC will check claims and take appropriate action to withhold or recover payments found to be dishonest or inaccurate;
- Anyone unable to claim online can use a telephone based application, further details are awaited;
- The grant will be included as taxable income in 2020/21;
This is only an outline of the SEISS and further details about the claim can be found at https://www.gov.uk/guidance/claim-a-grant-through-the-coronavirus-covid-19-self-employment-income-support-scheme.
Our updated working arrangement – We remain ‘Open for business’
Our staff have returned to office based working on a rota basis, each attending two/three days a week, whilst continuing to work from home at other times. They can still be contacted in the usual way either via email or by calling the office number where reception will divert your call to the appropriate staff member.
If you would like more information or if you require our assistance in determining your eligibility for the SEISS second grant please speak to your usual contact at the firm.
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