The UK Government announced measures to support the self-employed on 26 March 2020. Below is a summary of what we know.
Eligible self-employed individuals and members of partnerships can now apply to HMRC for financial support through the Self-employed Income Support Scheme (SEISS). HMRC have used existing information to invite potentially eligible individuals to apply.
The scheme is now open, and payments are expected to be made in early June. Each self-employed individual must make their application themselves; not through a proxy or agent such as a tax agent, adviser, or accountant. Doing so will trigger a fraud alert, and this will cause payments to be delayed.
This temporary scheme allows eligible applicants to claim a taxable cash grant of 80% of their average monthly trading profits and is paid out in a single installment covering three months. The grant is capped at £7,500 in total, and while it does not need to be paid back, it is subject to Income Tax and self-employed National Insurance.
Claimants are judged as eligible if they are a self-employed individual or a member of a partnership, and ALL of the following apply:
- their trading profits in the relevant tax year(s) must not exceed £50,000
- their trading profits in the relevant tax year(s) must be at least equal to their non-trading income
- they traded in the tax year 2018/19, and submitted their Self-Assessment tax return on or before 23 April 2020 for tax year 2018/19
- they traded in the tax year 2019/20
- they intend to continue to trade in the tax year 2020/21
- their trade has been adversely affected by coronavirus
There are many ways in which a self-employed person’s business can be adversely affected by coronavirus, for example:
They are unable to work because they are:
- on sick leave
- caring for someone else due to coronavirus
They have had to scale down or temporarily stop trading because:
- their supply chain has been interrupted
- they have fewer or no customers or clients
- their staff are unable to come to work
Those who are NOT eligible for this grant include:
- those operating limited companies
- those operating a trade through a trust
- those who pay themselves a salary and dividends through their own company
Grants under the SEISS are not counted as ‘access to public funds’, and the grant can be claimed by individuals on all categories of work visa.
Individuals can use the government’s online eligibility checker to see if they are eligible. To do so, individuals will need:
- their Self-Assessment Unique Taxpayer Reference (UTR) number
- their National Insurance number
If the eligibility checking tool indicates that an individual can apply, they can make their claim immediately and will need:
- their Government Gateway user ID and password
- full UK bank details (the account must be able to accept Bacs payments)
There is no need for an individual to make any calculations before applying; HMRC will calculate how much of a grant each person should receive if their application is accepted.
If an individual is successful in their application and receives the grant, they can:
- continue to work to whatever extent is possible
- start a new trade
- take on other paid employment
- take on voluntary work
- assume duties as an armed forces reservist
For further detailed information about this scheme, please see the government’s Self-employment Income Support Scheme webpage.