The Self-Employment Income Support Scheme - It's Child's Play

HMRC’s online portal went live in May enabling self-employed individuals to apply for the new Self-Employment Income Support Scheme (SEISS) grant, introduced by the government as a measure to help self-employed businesses suffering as a result of COVID-19.

We are now seeing clients get their payment, which is great news. Initially, it was not anticipated that the scheme would be available so soon thus praise to HMRC for making it live so quickly, and it’s so easy to use, it’s child’s play. HMRC state that you will receive your grant within 6 working days from submitting the application and you will need to make the first claim by 13 July 2020.

Once you have worked out if you are eligible, you need to ensure you have a live government gateway open for you to make the claim and then once it is live and ready for you to claim it is a very simple process, and you do not need to enter any figures as HMRC already have this information from your previously filed tax returns.

The grant is taxable and payable as one lump sum. It is calculated by taking 80% of your average earnings for three months, based on the average taxable profits from the three tax returns 2016/17, 2017/18 and 2018/19, or from the date you started trading if you haven’t traded for three years. The payment is capped at £2,500 per month (so a maximum of £7,500 grant will be payable for the three months).

There are certain conditions that must be met;

• You must have submitted your 2019 Tax Return

• You must still be trading and be trading when you apply

• You must have traded in the tax year to 5 April 2020 (2019/20)

• You must have lost profits due to COVID-19

You must also meet one of the two following conditions;

• Your average self-employed profits for the three tax years to 2018/19 (or if less the period since started trading) are less than £50,000 and more than half of your average taxable income for the same period, or

• Your self-employed profits for 2018/19 are less than £50,000 and more than half of your taxable income for that year.

You can check you are eligible by clicking the link which will take you straight through to HMRC’s online eligibility checker.

UPDATE AUGUST 2020 - 2ND SEISS GRANT

HMRC announced an extension to this scheme and self-employed businesses will now benefit from a second grant covering the next three months, which went live on 20 August 2020. This second grant will be 70% of average earnings capped at £2,250 per month. If you make a claim for this second grant, you will need to confirm your business has been adversely affected by coronavirus on or after 14 July 2020.

The scheme is expected to close on 19 October 2020.

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FUSE is an independent Chartered Certified firm of accountants and tax advisors based in Highgate Village, North London. We provide a dynamic range of services to clients working in property, media, entertainment and professional services. Our clients vary in size from self employed sole traders, small enterprises and medium size businesses. We believe that comprehensive financial planning and sound business financial advice are the keys to growth and profitability.