The Self-Employment Income Support Scheme (SEISS) portal opens today for applications.
Under the scheme, self-employed people adversely affected by the coronavirus pandemic can apply for a taxable grant.
Accountants cannot make applications on behalf of their clients. So, it is up to you to check your eligibility and to follow the application process.
What is the Self-Employment Income Support Scheme?
The scheme was set up by the government to support the self-employed – either as a sole trader or a partner in a partnership – following the lockdown.
Many self-employed people who have lost income are unable to be ‘furloughed’ so this grant was introduced to help them.
How it works
If successful, you can claim a taxable grant of 80% of your average monthly trading profits, paid out in a single instalment covering 3 months.
It is capped at a maximum of £7,500: that is equivalent to three months’ income at £2,500 per month.
The amount you are awarded is calculated by HMRC who use three previous years’ tax returns to work out your self-employment profits. The grant is equivalent to three months’ profits and is paid in a lump sum.
You cannot apply for more or less than you are given, as it is not calculated on the income you have lost. Instead, it is calculated as an average sum.
The grant is subject to tax and you are required to class the amount you are rewarded as income in your books and be included in your next self-assessment tax return.
Am I eligible?
Many people have already checked to see if they are eligible by using the HMRC eligibility checker as it was switched on last week.
But if you haven’t checked, there are a few things you need to know.
To be eligible you must:
- Were self-employed and trading during the 2018/19 and 2019/20 tax years
- And you submitted a tax return for the 2018/19 tax year on or before 23 April 2020
- And you intend to trade in this tax year (2020/21)
- And your self-employment profits have been adversely affected by the coronavirus. For example, as a result of self-isolated or shielding; or because you business has had to scale down, temporarily close, lost income or your supply chain has been adversely affected.
- Self-employment profits were less than £50,000 per year
- Those profits were equal to or more than your non-trading income. For example, if you are an employee and self-employed and you earn more from your job than self-employment, you are not eligible.
What you need
Before checking your eligibility, you need your Unique Tax Reference (UTR) and National Insurance (NI) numbers. Make sure you have these before using the eligibility checker.
Your UTR is on your self-assessment return or on any HMRC letters. If you are unable to find yours, you can visit HMRC’s website and request help to retrieve it.
After tapping in your UTR, you will then be asked for your NI number. Using this data, the checker lets you know if you can continue the process.
It will also ask you to log in or create a Government Gateway account. If you have used this before, make sure you have the correct number to avoid delays. If not, you will be asked to create one as part of the application process.
What happens next?
Once you have done this, HMRC puts you into the system if you are successful. They will then contact you via email or text to let you know the date and time you can apply.
Eligible applicants will be given a date and time between 13th and 18th May to fill in their applications, we understand.
If successful, your grant will be paid into your bank account around 25th May, or six days after you make your application.
As we have said, accountants cannot apply but if you are unsure of how to find your UTR number or Government Gateway details, please contact us and we will help where we can