COVID-19 Update: Self-Employment Income Support Scheme
On Monday 4th May 2020, HM Revenue & Customs updated its guidance on the launch of a new scheme: The Self-Employment Income Support Scheme (SEISS). This scheme has been launched by the UK government in a bid to aid individuals who are either self-employed or members of a partnership who have been negatively affected by the pandemic.
What is the Self-Employment Income Support Scheme?
The scheme provides financial support to those self-employed or members of a partnership by allowing such persons to claim a taxable grant of up to 80% of their average monthly trading profits.
In receipt of the grant, individuals can still carry on working or take up alternative employment.
Can I claim?
If you are either a self-employed individual or a member of a partnership and the following full set of points apply to you then you may be eligible to make a claim:
- Your business activities have suffered serious repercussions because of COVID-19;
- Your business activities were carried out in the tax year 2018 to 2018 and you submitted your Self-Assessment Tax Return either on or prior to 23rd April 2020 for that tax year;
- Your business activities were carried out in the tax year 2019 to 2020;
- You expect to continue business activities in the tax year 2020 to 2021
The serious repercussions to your business activities could include reasons such as inability to work because you are self-isolating, on sick leave or have caring responsibilities or you’ve had to temporarily cease or minimise trading activities because of COVID-19. You will have to confirm this to HMRC when making a claim.
How much can I claim?
The grant has a limit of up to £7500.00 and is paid out in a single payment which covers 3 months’ worth of average trading profits. It is subject to Income Tax and National Insurance. HMRC decides if individuals are eligible to receive a grant and if so, how much they will receive.
After you have claimed, you will automatically be informed if your claim for the grant has been approved by HMRC. The single grant payment will be paid to your bank account within 6 working days. It is advised that you keep a copy of all records of your claim.
What if I am not eligible for the scheme?
Alternatively, there are other government backed means of financial assistance for employers:
- Deferral of Self-Assessment Income Tax and VAT payments
- Coronavirus Job Retention Scheme
- Business Interruption Loan Scheme
- Bounce Back Loan
- Universal Credit- you can still apply for this whilst waiting for approval of the grant for the SEISS but this may affect the amount of Universal Credit you receive.
Should you have any queries regarding the above information or you are an employer and require our legal services, please contact a legal professional at Hudson McKenzie via email firstname.lastname@example.org or by telephone +44 (0)20 3318 5794.