The Government have now finalised the arrangements for the self-employed to potentially receive a grant to help mitigate the financial effects of COVID-19.
The scheme will allow the self-employed, if eligible, to claim a taxable grant of 80% of your average monthly trading profits, paid out in a single instalment covering 3 months and capped at £7,500 altogether.
The grant will be subject to Income Tax and self-employed National Insurance.
Who can claim?
You can claim if you’re a self-employed individual or a member of a partnership and:
- you traded in the tax year 2018 to 2019 and submitted your Self-Assessment Tax Return on or before 23 April 2020 for that year;
- you traded in the tax year 2019 to 2020;
- you intend to continue to trade in the tax year 2020 to 2021;
- you carry on a trade which has been adversely affected by coronavirus.
Please note – unlike the employee scheme, here you CAN keep working. And you do not need to prove Coronavirus impact. However, HMRC says it only expects people to use the SEISS if they’ve been negatively impacted, and is introducing checks to prevent fraud.
Check if you are eligible to claim
HMRC now have an online tool which will allow you to find out if you are eligible to make a claim. This can be found at https://www.tax.service.gov.uk/self-employment-support/enter-unique-taxpayer-reference . You will need your self-assessment Unique Taxpayer Reference (“UTR”) and National Insurance number for this – both of these appear on the first page of your annual Tax Return.
Once you have done this, and if you are eligible, you will be advised that “you need to use Government Gateway to sign in and add your contact details. If you do not have an existing Government Gateway user ID and password you should create them now”.
PLEASE NOTE – White Hart Associates as your agents CANNOT make this claim for you. HMRC did consider this option, but decided against it on the grounds of implementation speed and complexity. THEREFORE, YOU WILL NEED TO SET UP YOUR GOVERNMENT GATEWAY ACCESS NOW IN ORDER TO BE ABLE TO CLAIM THE GRANT. The link above details the way to do this.
How much you will get
You will get a taxable grant based on your average trading profit over the 3 tax years:
- 2016 to 2017
- 2017 to 2018
- 2018 to 2019
HMRC will work out your average trading profit by adding together your total trading profits or losses for the 3 tax years, and then will divide by 3.
The grant will be 80% of your average monthly trading profits, paid out in a single instalment covering 3 months, and capped at £7,500 altogether. The online service will tell you how HMRC have worked the grant out.
The grant amount will be paid directly into your bank account, in one instalment.
How to claim
The online service will be available from 13 May 2020. If you are eligible, HMRC will tell you the date you can make your claim from. If you claim is approved, you will receive your payment within 6 working days.
After you’ve claimed
Once you’ve submitted your claim, you will be told straight away if your grant is approved. We will pay the grant into your bank account within 6 working days.
You must keep a copy of all records in line with normal self-employment record-keeping requirements including:
- the amount claimed;
- the claim reference number for your records;
- evidence that your business has been adversely affected by coronavirus.
You will need to report the grant:
- on your Self-Assessment Tax Return;
- as self-employed income for any Universal Credit claims;
- as self-employed income and that you’re working 16 hours a week for any tax credits claims.
Hopefully this SEISS claims process will run smoothly, but as ever we at WHA remain available to assist our clients in whatever way possible – please do not hesitate to contact us if required.