Applying for the Self-Employed Income Support Scheme
Posted on 11th May 2020 at 14:39
Who is covered by SEISS
The Scheme will cover self-employed people who paid tax on trading profits of up to £50,000 in the 2018/19 tax year.
The Treasury has estimated that more than half of the country’s six million self-employed people could benefit.
HMRC is contacting 3.5million who might be eligible under the Scheme to claim a backdated cash grant.
Here are some things you should know if you think you will qualify.
How you will be contacted
You will receive a letter, email or text message from HMRC with information about how to make an online claim. Be very careful about fraudulent messages; don’t click any links in messages you receive or give any personal details.
What you could receive
SEISS will provide a taxable grant of up to 80% of your income, based on your taxable profits over the last three tax years. It is capped at £7,500 over a three-month period.
If you’re application is successful, you’ll receive a taxable grant based on your average trading profit for the tax years:
2016 to 2017
2017 to 2018
2018 to 2019.
The amount you receive will simply be based your total trading profits or losses for each of the three tax years and dividing the result by three.
The grant will be paid directly into your bank account in a single instalment covering three months. Your payment should arrive six working days after you make your claim.
SEISS is available to people who make most of their income from self-employment.
SEISS is open to any self-employed person with income up to £50,000, according to their 2018/19 tax return.
Self-employed people who qualify will receive the same level of support as PAYE employees who are facing redundancy due to the current measures in response to the coronavirus outbreak.
The grant will provide 80% of typical earnings capped at £7,500 in total.
Income tax and national insurance will be payable.
Money will be paid by HMRC straight into your nominated bank account.
Only those who have made, or are about to make, a tax return for 2018/19 tax return can apply.
What you should do
Check your tax returns to see whether your trading profit exceeded £50,000 for the three tax years to 2018/19.
Use HMRC’s online tool to check if you are eligible to make a claim. Your accountant or tax agent do this on your behalf. You will need your Self Assessment Unique Taxpayer Reference (UTR) number and your National Insurance (NI) number
If you don’t hear from HMRC in the next few weeks and you think you qualify, make your application anyway.
What you will need to make a claim
Self Assessment UTR
National Insurance number
Government Gateway user ID and password
bank account number and sort code for the account you want HMRC to pay the grant into (this must be an account where a BACS payment can be accepted).
If you don’t have a Government Gateway ID
If you don’t have a Government Gateway ID you will be prompted to create one when you use the HMRC’s online tool to check if you are eligible, rather than when you apply.
When you create an ID through the SEISS service, you’ll be asked to verify your identity by providing details from your driving licence photocard or your UK passport. If you don’t have either of these documents, you’ll be asked for a piece of financial information, such as the date you set up a mobile phone contract. If you set up your ID using this process, you won’t have to wait for an authentication code (PIN) to be sent in the post.
If you are self-employed with your own company
There are around 1.8million people who are owner-managers of their companies, paying themselves mostly through dividends. Typically, people in this category pay themselves around £800 per month via pay-as-you-earn (PAYE) and take most of their income as taxable dividends.
If this is your situation, you won’t be covered by the Scheme.
However, you could apply to furlough 80% of your PAYE income through the Job Retention Scheme for salaried staff. If you are earning £800 per month through PAYE, you would receive a monthly payment of £640. Like other furloughed workers this will be subject to the usual income tax and other deductions.
You can continue to carry out your legal obligations as a company director but nothing else.
If you have only just become self-employed
SEISS will only be available for self-employed people who have filed a tax return for the 2018/19 tax year.
You can apply for Universal Credit, which has been temporarily increased, without a minimum income floor, to match levels of statutory sick pay (£94.25 a week).
However, if you are applying for Universal Credit for the first time, you will usually have to wait for five weeks to receive a payment. If you have savings of £16,000 or more, you won’t qualify for Universal Credit.
If you would like to discuss how to apply for support as a self-employed person, please get in touch.
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