The government’s announcement of the Job Retention Scheme extension was accompanied by the announcement of the Self Employment Income Support Scheme (“SEISS”) also being extended for a further six months from November 2020 to April 2021 in a bid to give more security to those affected by Covid 19.
What does this mean for me?
If you are self employed and eligible for the SEISS then you are now able to claim a further two grants on top of those already in place. The third grant covering the period of November 20 to January 21 and being worth 80% of the average monthly profits. This will be capped at £7,500 in total. The fourth and final grant (as it currently stands) will cover the period February 21 to April 21; the government is yet to announce what this will be capped at.
Who can apply?
Self-employed individuals or members of a partnership can apply if you:
- Have submitted your Income Tax Self Assessment tax return for 2018/19
- Traded in the tax year 2019/20
- Are trading when you apply, or would be except for COVID-19
- Intend to continue to trade in the tax year 2020/21
- Have lost trading/partnership trading profits due to COVID-19
- Have self-employed trading profits of less than £50,000, and more than half of your income comes from self-employment (HMRC decide this based on your tax returns filed for the three years to 2018/19).
- You are still eligible if you meet the criteria above but did not claim the previous grants.
How much will people be able to claim?
The deadline for applying to the first and second SEISS has now passed and you will not be able to receive these grants. The third grant however is still open for application and will cover 80% of the average profits, up to a cap of £7,500.
The government is yet to announce details surrounding the fourth grant. Once it has been announced we will be updating our relevant blog posts.
It is important to understand that these grants are not tax-free income. The payments are considered as part of your trading profit for the year and will be taxed along with the rest of your trading profits through your annual Self-Assessment Tax Return.
The payments will form part of your trading profit for the year and be taxed along with the rest of your trading profits through your Self-Assessment Tax Returns. Don’t get caught out!
What is the claiming process?
Step 1: Eligibility
HMRC have created an eligibility tracker that allows you to see if HMRC think that you are eligible for the SEISS based on your tax return data. The tracker requires your NI number and your personal tax reference and can be used for both grants. Find it here.
Once you have used the tracker HMRC will contact you via email, SMS or post to update you on whether you can or cannot claim. If you receive a rejection notice or no notice at all we recommend to contact HMRC to request confirmation as to why and to ask for them to review your position.
Step 2: Application
Once you have received confirmation that you are eligible you will need to log into your Government Gateway account. To mitigate the rush on this happening the Government will be issuing slots to each person in the early stages.
If you don’t have a Gateway log in don’t worry! You can set one up as part of your application process. It’s quick and easy to do.
Once on the SEISS portal you will see the HMRC calculation showing you your potential claim amount and you will be asked to:
- Confirm your eligibility criteria;
- Complete all declarations, including that the business has been adversely affected by coronavirus.
- Supply the bank account details for the grant to be paid into.
This application process is to be completed by you, the taxpayer, and only you. HMRC are being increasingly wary of fraud and have in place any-fraud measures to ensure that the claims are legitimate.
Step 3 Payment:
If the application is successful the HMRC are aiming to process and pay out the claim grants within 6 working days of the applications approval.
It is advised to regularly check your government gateway and emails to make sure you have not missed any important updates regarding the SEISS and your application.
HMRC have made it clear that any potential fraudulent claims will be investigated. If the claims are found to be fraudulent they will be pursuing legal action to recover the full amount and charge penalties where necessary.
If you have any other questions please feel free to contact us where one of our team members will be happy to assist you further!