The Self-Employment Income Support Scheme (SEISS) is a temporary scheme that will enable those eligible to claim a taxable grant worth 80% of their average trading profits up to a maximum of £7,500 (equivalent to three months’ profits) in a single instalment. Given the announcement on 12 May 2020 that the Furlough scheme for employees has been extended to October in some shape or form, it is likely that the period of availability for SEISS will be extended beyond three months too.
Taxpayers are eligible if their business has been adversely affected by coronavirus, they traded in 2019-20, intend to continue trading and they meet three criteria. These are:
- Earning at least half of their income through self-employment.
- Having averaged trading profits of no more than £50,000 per year
- Trading in the tax year 2018 to 2019 whilst having submitted their 2019 self-assessment tax return on or before 23 April 2020.
HMRC is using information that individuals have provided in their 2019 tax return – and returns for 2017 and 2018 where needed – to determine their eligibility.
From 4 May 2020, HMRC began contacting those self-employed individuals it believes are entitled to claim for a SEISS grant from 4 May 2020. This contact is coming by a variety of methods including e-mail, SMS and as a last resort letter. HMRC is also providing an eligibility checker which is available to anyone, including agents and those who have not been contacted by HMRC. Hopefully the majority of people have already been contacted, since HMRC will be using tax return figures they already hold, rather than awaiting information from the taxpayer.
The SEISS application portal will open to taxpayers on a staged basis between 13 and 18 May 2020, with the portal opening on different days for different taxpayers (the day is randomly allocated by HMRC, it is not first come, first served). Taxpayers then log in to their government gateway account (or select the option to create an account) to complete the application process. Note that HMRC calculates the grant from its records and at no stage does the taxpayer have to provide any information about their income. It is irrelevant which date individuals are allocated since no funds will be paid out until 25 May 2020 at the earliest. If the application is completed and submitted later than 18 May 2020 then the aim is that the grant will be paid out within six working days from then, once HMRC have carried out their checks.
If the taxpayer does not already have a government gateway account, HMRC has updated the process for acquiring a Government Gateway ID for the SEISS. This change in process is supposed to avoid delays. HMRC is advising individuals who need to create a Government Gateway ID to do so via the SEISS service to make sure the correct type of ID is generated.
An online checker is available which will let taxpayers check their eligibility for themselves, as well as giving them a date on which they can apply. Individuals will need their unique taxpayer reference (UTR) and National Insurance number and should ensure their details are up-to-date in their government gateway account.
Where individuals are ineligible for the scheme, HMRC will direct them to guidance setting out the conditions to help them understand why they are ineligible, and advice about other support that might be available to them, such as income tax deferrals, rental support, Universal Credit, access to mortgage holidays and the various business support schemes the government has introduced to protect businesses during this time.
HMRC warns it expects support phone lines to be very busy over the next few weeks as people enter this new scheme, so is encouraging taxpayers to only call if they cannot find what they need on GOV.UK, from their tax agent or via HMRC’s webchat service.
Although we are unable to make these applications on your behalf – do get in touch if you have any questions regarding the application process.
Posted by Paul Short
The views expressed in this article are the personal views of the Author and other professionals may express different views. They may not be the views of Lambert Chapman LLP. The material in the article cannot and should not be considered as exhaustive. Professional advice should be sought in connection with any of the issues contained in the article and the implementation of any actions.