Your questions answered: The Self-Employment Income Support Scheme
Last week, Chancellor Rishi Sunak announced the Self-Employment Income Support Scheme (SEISS). Today, we have summarised the most frequently asked questions about the scheme, in an attempt to make things that little bit easier.
For those out of the loop, the scheme compromises a taxable grant, which will be worth 80 per cent of your average trading profit (up to a max of £2,500 a month) for the next three months, although they may extend it if necessary.
How do I apply?
The first thing to say is that you cannot apply for it yet.
HMRC say they will be reaching out to those who are eligible before June. Importantly, they determine eligibility using the 2018-2019 returns to identify eligible individuals.
Am I included?
You must meet all of the following criteria:
- You did business in the 2019-2020 tax year
- Your business activities are still currently in action or have stopped only due to Covid-19
- You plan to carry on in the business, where possible, in tax year 2020-2021
- You have lost trading profit though your self-employment or partnership due to CV-19.
- At least 50 per cent of your income comes from self-employment
- You either made less than £50,000 trading profit in 2018-2019, or made less on average than £50,000 trading profit a year for the years 2016-2017, 2017-2018 and 2018-2019 (in this case these profits must represent at least 50% of your income for every year over the three-year period.)
- You have submitted a selfassessment tax return for the year 2018-19*
*Whoops, I forgot to submit my Income Tax self-assessment tax return in January.
The government have given a grace period to get your Self-Assessment tax return in. The deadline is the 23rd April.
Get it done as soon as feasible, as HMRC are likely to work through the ones already submitted first and then move on to late submissions.
How long will it take?
This is not clear, but those who have submitted their tax returns for 2018-2019 already are likely to be contacted first.
How will they know what to pay me?
HMRC will take the total business profits from the beginning of tax year 2016 to end of tax year 2019, divide that by three, and use this to calculate a monthly amount and your 80% allowance, up to a maximum of £2,500. If you have not been trading as long, they will use a shorter period.
How will I receive the money?
HMRC will contact you if your application is successful and let you know how much they are sending you. When payment goes out, it will be one lump sum straight into your bank account.
How can I tell if the email is from HMRC or a scam?
HMRC will at no point ask for you to send any information or click any links directly in an email. The only way to apply for this scheme will be through the portal on gov.uk once you have received an invitation to apply.
Will I need to declare this ‘income’ anywhere?
Yes. If you claim tax credits don’t forget to include this on your claim form as income.
This hasn’t answered questions about my situation, where can I find out more?
Keep looking at the government website for the latest updates, or comment below and we will do our best to help.
By Freelance Corner