- From 1 November 2020, the Self-Employed Income Support Scheme (SEISS) will be extended. Those who are currently eligible for the existing SEISS grants should be able to claim if they are actively trading, and intend to continue trading, but have been impacted by reduced demand due to COVID-19. The extension will provide two grants and will last for six months, to April 2021. Grants will be paid in two lump sum instalments as follows:
- 1. A taxable grant covering the 3 months from November 2020 to January 2021, equal to 20% of average monthly trading profits but capped at £1,875 in total.
- 2. A taxable grant covering the 3 months from February to April 2021. HMRC have yet to set the level of this grant.
- The Self-Employment Income Support Scheme (SEISS) offers some support to self-employed workers affected by COVID-19.
- The second SEISS grant allows self-employed individuals and partners in partnerships to claim a taxable grant of 70% of their trading profits, up to a maximum of £2,190 per month. The grant is paid in one single instalment covering three months.
- Claims can be made until 19 October 2020.
- To qualify, your business must have been adversely affected by COVID-19 since 14/07/2020 - this is typically defined as reduced income or increased costs. There isn't a defined threshold for proving how much your income/expenditure has changed, however you are encouraged to keep good records of how your business has been adversely affected, in case HMRC were ever to open an enquiry.
- In addition, you must:
1. Have submitted your self-assessment tax return to HMRC for 2018/19 before 23/04/2020
2. Have trading profits of less than £50,000 and these profits must make up more than half of your total taxable income
3. Have traded in the 2019/20 tax year
4. Be trading as a self-employed individual/partner when you apply, or would have been if it wasn’t for COVID-19
5. Intend to continue to trade as such in the tax year 2020/21
- When assessing the £50,000 limit in b) above, HMRC will look at the trading profits on your 2018/19 tax return AND your average trading profits for the last 3 tax years, i.e. 2016/17, 2017/18 and 2018/19. If your profits under either measure meet the criteria (i.e. less than £50,000 and more than half of total taxable income) then you should qualify for the scheme.
- The grant will be calculated as 70% of average trading profit from the last 3 tax years, i.e. 2016/17, 2017/18 and 2018/19, or the period since becoming self-employed, if shorter. There is a cap of £2,190 per month.
- This amount will be paid directly into your bank account in one instalment, within 6 working days of making a claim.
- The grant received will be subject to Income Tax and also counts as income for the purposes of tax credits.
- New parents who are self-employed may also now be able to make a claim if their income was affected in the 18/19 tax year, either due to pregnancy or taking time off for childcare in the first 12 months after the birth. If you believe that you may be affected by this change, please contact us for further information.
- You do not need to have made a claim for the first SEISS grant in order to receive the second grant.
Finally, self-employed individuals are now able to apply for Universal Credit in full https://www.gov.uk/universal-credit.