As the Self Employment Income Support Scheme is anticipated to ‘go live’ shortly, HMRC have begun issuing further guidance and details of how the scheme might work in practice.
As a reminder, this scheme will allow eligible self-employed individuals to claim a taxable grant worth up to 80% of their trading profits, up to a maximum of £7,500 covering the three months from March to May 2020.
HMRC have announced that they will start writing to the people they believe are entitled to claim this week, inviting them to apply. Broadly, those eligible will be a self-employed individual or a member of a partnership and who:
- traded in the tax year 2018 to 2019 and submitted their Self-Assessment tax return on or before 23 April 2020 for that year
- intend to continue to trade in the tax year 2020 to 2021
- had trading profits in 2018/19 of less than £50,000 and their non-trading income was less than 50% of their overall income, or
- had average trading profits for the previous three tax years, including 2018/19, of less than £50,000 and at least equal to their non-trading income averaged across those three years.
Partnerships are slightly more complex and further guidance can be found here: https://www.gov.uk/guidance/how-hmrc-works-out-total-income-and-trading-profits-for-the-self-employment-income-support-scheme
However in addition to the above, in order to claim, the self-employment business must have been adversely affected as a direct result of Covid-19. Accordingly, not everyone will be eligible and HMRC are encouraging agents such as ourselves to help clients to determine whether or not they may be entitled to apply.
Difficulties in trading during the current outbreak could include, but are not limited to, having to temporarily cease trading due to enforced shut down, sickness of either the proprietor or their staff, a requirement to self-isolate, caring responsibilities due to Coronavirus, loss of overseas customers, issues around travel restrictions or a failure of suppliers to produce or deliver required goods. However if business has continued in line with previous years, or there are other reasons for a decline in trade, then it may not be eligible and we expect HMRC to be looking at claims closely further on down the line.
For those who are unsure, the HMRC online eligibility check is a good first step: https://www.tax.service.gov.uk/self-employment-support/enter-unique-taxpayer-reference
You will need your Unique Tax Reference (UTR) and National Insurance Number to hand to complete the form. For those who are not eligible, there may be other support available.
The support finder tool helps businesses easily access the financial support they are eligible for in one place: https://www.gov.uk/business-coronavirus-support-finder
If you believe you are eligible but the online form tells you that you are not, please contact us. There is an option to ask HMRC to review your circumstances. They will do so from the 18 May onwards, and let you know the outcome of their review by the end of May.
2018/19 Tax Return and Eligibility
For those who wanted to apply for the scheme but were late in submitting their 2018/19 tax returns, an extension was granted until 23 April.
HMRC have now clarified a few further points around 2018/19 tax returns namely;
- Those who have amended their 2018/19 (or earlier) tax returns between 26 March and 23 April will have those amendments ignored for the purposes of calculating the support due.
- Those who did submit a late 2018/19 tax return between 26 March and 23 April will be subject to additional fraud checks by HMRC.
Claiming & Payment
For those that are eligible, you will be asked for contact details which HMRC will use to contact you once you can apply. The ‘go live’ date for the system is expected to be around the 13 May.
You will then need to complete the claim yourselves online, there is currently no facility to allow agents to complete the form on your behalf. However we can assist with the information you may require.
You should be told immediately if your grant has been approved and once a successful application has been made, we understand that payment can be expected within 6 working days.
We are aware of an increasing number of scam emails, texts and calls in connection with Covid 19, from fraudsters claiming to be HMRC. Please be vigilant, do not give out personal details and report any such messages to firstname.lastname@example.org
If you require assistance with your SEISS claim or the information required, please contact Will or a member of our tax team on email@example.com or call 01242 776000 to request a call back.