Claiming The HMRC Self-Employed Income Support Scheme

We have covered many types of financial support for SMEs since the outbreak of COVID-19, but we haven’t yet touched on what support is available for the self-employed. So, are you self-employed and in need of financial support due to the COVID-19 outbreak?

In this blog post, we will discuss the financial assistance supplied by HMRC for the self-employed; The HMRC Self-Employed Income Support Scheme (SEISS). You can also find out here whether you are eligible for SEISS and how to apply for it.

What Is The Self-Employed Income Support Scheme?

The HMRC Self-Employed Income Support Scheme has been created to help keep businesses owned by the self-employed intact during and after the COVID-19 pandemic. SEISS is where self-employed individuals can claim a taxable grant which is worth 80% of their average monthly profit from business trading. It’s paid out as a single instalment which will cover 3 months worth of the business profits. However, you cannot claim any more than a total of £7,500 with the Self-Employed Income Support Scheme.

Luckily for the self-employed, the grant doesn’t have to be paid back but it will require the payment of income tax and self-employed national insurance which you can find more about here.

Am I Eligible For The Self-Employed Income Support Scheme?

The SEISS is available for the majority of self-employed individuals or members of partnerships that have been affected by the COVID-19 outbreak. However, there are some terms and conditions:

  • Your business must have had a trade significantly affected by COVID-19. Some examples of your business’ trading being affected by COVID-19 might be: the need for self-isolation or shielding, you have contracted COVID-19, you have fewer customers or clients or your supply chain has been interrupted. You can find some more examples here.
  • You must have traded within the tax year of 2018-2019 and submitted your self-assessment tax return on or before 23rd April 2020 for that year.
  • Your business must have also traded in the tax year of 2019-2020 and intend to continue trading throughout the 2020-2021 tax year.
  • You cannot apply for the Self-Employed Income Support Scheme if you are a limited company or operate a trade through a trust.
  • Your business trading profits cannot be any more than £50,000 and must be at least equal to your non-trading income.

How Does HMRC Work Out My Eligibility For SEISS?

The first step HMRC takes when checking if you are eligible for the Self-Employed Income Support Scheme is by reviewing your self-assessment tax return from the 2018-2019 tax year. HMRC will also check that your trading profits aren’t more than £50,000.

If your reason for being eligible for SEISS isn’t based on your 2018-2019 self-assessment tax return, HMRC will then look at three previous tax years instead. For more information on how HMRC works out your SEISS eligibility, click here.

When Can I Apply For The Self-Employed Income Support Scheme?

The SEISS was actually opened to claims weeks earlier than expected, meaning self-employed individuals have been able to apply for the COVID-19 grant since as early as 13th May 2020. As applications have already been open for nearly 2 months, self-employed individuals still in need of financial support only have until 13th July 2020 to get their grant applications in.

However, due to the ongoing effects of COVID-19 on self-employed businesses, HMRC has decided to extend the Self-Employed Income Support Scheme to 17th August 2020. There are a few key reasons why SEISS has been extended by HMRC for self-employed individuals:

  • For those that missed the opportunity to apply for SEISS before 13th July 2020 and are still in need of financial support from 17th August 2020.
  • For businesses that were not affected by COVID-19 until after 13th July 2020.
  • For those that are in need of another grant as the 3 months that were covered are now over.

If you’re self-employed and your business’ trading has been affected by the COVID-19 outbreak, you can start your Self-Employed Income Support Scheme claim here.

Are You Self-Employed & Need An Accountant?

We understand that the Self-Employed Income Support Scheme still might not be enough to keep your business operating as well as it was before the COVID-19 outbreak. That’s why our finance experts at Stonehouse Accountants are available to help with all your other financial needs, from annual account preparation to self-assessment tax returns. To get in contact with our team, feel free to contact us here or call us on 01733 265888.