Self Employed Income Support Scheme (SEISS)
Under this scheme self-employed workers (and those in partnerships) will be able to apply for taxable grants to assist during this time for loss of income due to the coronavirus pandemic. In a similar way to those who are employed, the government will provide you with a taxable grant to cover up to 80% of your profits up to £2,500 per month. As it’s a grant it will not need to be paid back and you can keep working in this time if it is possible for you to do so safely unlike the furlough for employees who must cease working.
Grants are decided by HMRC based on your profits for 2018/19 or over the last three years. To assist in combatting fraud you must have filed a tax return for 2018/19. This means you must have been self-employed prior to 6 April 2019. If you were due to file a 2018-9 tax return but missed the deadline this year, the government has given a 4 week grace period to submit your tax return and then you can still access the scheme.
You must earn more than half your total income from self-employment, and this must be visible on your 2018/19 tax return. If not, the average of your 2016/17, 2017/18 and 2018/19 tax returns. Your average trading profit must be less than £50,000 per year. Those whose average annual trading profit is £50,000 or more won’t be able to get any support from this scheme.
We expect payments to be made in June, and payments will be likely backdated to cover March, April and May (in form of a lump sum). The scheme will operate across the UK and is set to last for at least three months, though this could be extended.
As noted above, the grants are taxable and will need to be recorded in your 2020/2021 tax returns. It’s up to individuals to decide if they would like to claim the grant, if you are in a fortunate position to not need support at this time you do not have to, and keep in mind it will push up your taxable income in the future.
How do I apply for the SEISS?
Those who are eligible for the Self-Employment Income Support Scheme will be contacted by HMRC directly – the Government hasn’t said when this will be, only that it will happen “once the scheme is operational”. At that point you’ll be asked to fill in an online form, and the grant will then be paid directly into your bank account.
There’s no need to contact HMRC now as there’s nothing you can do to apply at this stage. If there are any changes, we will update this page will new information.
I am eligible but can’t wait until June – what can I do?
Many may struggle to wait until June to receive the cash grants, to tide you over until then you can try applying for a business interruption loan if eligible, or Universal Credit or Employment and Support Allowance.
In addition, it may also be worth using any money you have set aside for your July tax bill to cover immediate expenses until your grant comes through in June. This especially applies given the July self-assessment tax payment can be deferred until January 2021.